All Forum Posts by: Lan Bak

Can you offset depr. recapture with carry forward losses on sale of a Rental property for a Non Real estate professional ?

Example (putting non depr. land value aside) :

Purchase price - $100,000

Selling Price - $125,000

Allowed Depr/year - $3636

Property is sold after 10 years with a passive carry forward loss of $30000

Capital gain based on adjusted basis - $61360 (125000 - 63640)

Actual capital gain/loss is -$5000 (61360 - 36360 - 30000)  [No capital gain tax I assume]

Depr recapture tax is owed on $36360 or on $31360 (36360 - 5000) ?

or in other words, can the carry forward loss be fully used or the $5000 passive loss needs to be carried over ?

Thanks in advance !

IIRC, Zillow was just flipping homes similar to opendoor and other ibuyers.

While Flock is actually implementing the IRS 721 section directly
- Exchange your rental property into a (UP)REIT .

This bypasses the whole DST to REIT transition since Flock purchases the property and puts it in their one REIT. I am guessing they can of course sell it off subsequently if it underperforms.

The proof of the pudding is in their sustained payouts and capital appreciation. Not much history as of now.

Thanks @Jon Taylor for the great insights and in depth info. Agree that FFO is a good barometer.

As I dig more deeper, it seems that most of these investments have multiple layers of fees built-in

at key points like upfront, ongoing, redemption/exit etc.

I was curious if anyone had signed up with Flock and had additional insights.

Thanks Dave. I have been told that the 721 UPREITS pass on 50% of their yield payments as non-taxable (I am assuming via depreciation/expenses). Is my understanding not right ?

Looking to get out of the active landlord business and exploring pure DST vs. 721 Exchange.

From my limited reading, a DST-721 Exchange seems to be a better option except it is a one-way door (no exchange back to DST or 1031).

Looking for some inputs, comments and gotchas in evaluating both options.

Comments on upfront and ongoing fees are especially welcome :)

Thanks in advance !