1031 Exchange, Cost Seg, SDIRA/401k

Posting about 1031 Exchange, Cost Seg, Real Estate IRA/401k | |

[1031 Exchange, Cost Seg, SDIRA/401k @BernardReisz]

Using a DST to achieve a successful 1031 Exchange🔄

As a 1031 exchanger, you may find yourself struggling to identify and close on a replacement property, finding yourself looking down the barrel of a failed 1031.  DSTs are your savior!

A DST presents an effective way for you to buy 1031 qualifying like-kind property as a pre-packaged asset, ready for passive investment.

What is a DST and what are its benefits?
👉DST stands for Delaware Statutory Trust, an investment trust which holds one or more pieces of real property.
👉Investors can acquire a beneficial interest in a DST, thereby obtaining a fractional ownership interest in the property held by that trust.
👉The DST structure is generally preferred, over TICs, by lenders and has become the structure of choice in the industry.

Why are DSTs such a big deal for 1031 exchange investors?
⏩DST's can be the key to successful 1031 tax deferral when you don't have other replacement property that you're excited to acquire.
⏩Remember: 1031 provides little wiggle room: 45-days for identification, 180 Days to close
⏩DST's enable you to "retire" from real estate (the toilets, tenants, and trash), while still investing in real estate and getting all the tax benefits (e.g., 1031 exchange, depreciation write-offs, basis step-up).

Can't I just passively invest in a syndication and get all the same 1031 tax benefits?
Nope! You can not invest your 1031 proceeds as an LP or GP in a syndicated real estate deal! (You may be able to use a TIC structure, which we've posted about elsewhere.)

Why can't a syndicated real estate investment be 1031 replacement property?
▶️ 1031 Replacement property and relinquished property must both be REAL PROPERTY of like-kind.
▶️ A partnership interest - even if the partnership’s sole asset is real property - is NOT considered real estate and, ipso facto, NOT eligible for Section 1031.
▶️ Syndicated real estate deals are typically structured as tax partnerships, and the asset owned by investors is a partnership interest - which is not treated as real estate for 1031 purposes.

#1031exchange #costsegregation #sdira #resurefinancial

[1031 Exchange, Cost Seg, SDIRA/401k @BernardReisz]

@taxlady04 Rather than attempting a series of long comments, sharing a link to a short article I wrote. Worth mentioning that I don’t sell these things. :)

https://t.co/ydBwWFYIJp

[1031 Exchange, Cost Seg, SDIRA/401k @BernardReisz]

My experience with AI for tax mirrors yours… AI performance for tax questions has been dismal, to the extent that I’m almost questioning all the hype surrounding it. At least for tax matters I can identify the fallacious output… too risky to rely on for subjects for which I don’t have that ability.

[1031 Exchange, Cost Seg, SDIRA/401k @BernardReisz]

@natesosa_CPA CPE?! I'm in!

[1031 Exchange, Cost Seg, SDIRA/401k @BernardReisz]

@natesosa_CPA While this is fantastic for Cost Seg, most folks are overlooking the fine print and are assuming any asset placed in service after 1/19/25 is eligible.

[1031 Exchange, Cost Seg, SDIRA/401k @BernardReisz]

The One Big Beautiful Bill Act is now the law in the land of the free and home of the brave!

🔥100% Bonus Depreciation is Back

🔥Depreciation add-back for 163(j) is in

🔥Section 179 limits are up

🔥Qualified Production Property is eligible for 100% Bonus Depreciation

🔥1031 exchange is unscathed

🔥 O-Zone benefits are expanded

Real estate's gonna be lit! 🔥🔥🔥

Of course, the devil is in the details. Seeing lots of new "tax strategies" on SM being presented by folks that haven't read the fine print. The guys that write these things are sharper than you think.

For a working summary and details of the One Big Beautiful Bill Act, check out this resource.

#1031exchange #costsegregation #tax #sdira #resurefinancial

https://t.co/Z3hPLjw9Sf

[1031 Exchange, Cost Seg, SDIRA/401k @BernardReisz]

Wishing You One Big, Beautiful Independence Day!

Freedom is the foundation and goal of everything we do.

On this July 4th, The One Big Beautiful Bill is creating opportunity for financial freedom.

100% Bonus Depreciation is back!

This is going to be a yuuuge shot-in-the-arm for real estate!

Whether you're leveraging real estate professional tax status (REPS) or the Short-Term Rental Loophole (STR Loophole), pairing your investment with Cost Segregation is going to be a more powerful strategy than ever - for those just getting on the path to financial freedom and those already there.

#1031exchange #costsegregation #sdira #resurefinancial

[1031 Exchange, Cost Seg, SDIRA/401k @BernardReisz]

Failed 1031 Exchange QOF Combo for extended tax-deferral opportunities

There are many ways Qualified Opportunity Zone investing can be combined with 1031 Exchange tax deferral.

👉Combining Failed 2-year Straddling 1031 Exchange and QOZ Tax Deferral

If a failed 1031 exchange straddles two years and the exchangor does not elect out of the installment method, the installment method defers the gain until the year of receipt of exchange proceeds from the QI.

Ipso facto, if a failed 1031 exchange straddles two taxable years, the exchanger has multiple QOZ 180-day periods to choose from, starting on any of the following dates:
▶️The date the property was sold. The exchanger must elect out of the installment method to use this period.
▶️The date the QI distributes exchange proceeds; or
▶️The last day of the taxable year during which the QI distributes exchange proceeds.

👉Combining Failed 2-year Straddling 1031 Exchange and QOZ Tax Deferral For Partners

If a partnership transfers property, the general QOF 180-day periods apply to the partnership and the partnership itself can reinvest gains from a failed 2-year straddling 1031 in a QOZ, using the same deadlines that apply to all investors.

If a partnership does not reinvest sale proceeds in a QOF, partners can independently reinvest their share of the partnership gain in a QOF under the deadlines that apply to partners.

Thus, assuming the partnership does not reinvest failed 1031 installment sale proceeds in a qualified opportunity fund, a partner could choose from any of 6 different QOZ 180-day periods to reinvest the exchange proceeds in a QOZ, depending on whether the partnership elected out of the installment method.

If the partnership does not elect out of the installment method, the 180-day period may start:
▶️The date the partnership receives failed 2-year straddling 1031 exchange proceeds from the QI
▶️The last day of the taxable year during which the QI distributes 2-year straddling 1031 exchange proceeds
▶️Partnership tax return due date for the year of receipt of 2-year straddling 1031 exchange proceeds from the QI

If the partnership elects out of the installment method, the 180-day period may start on the following dates:
▶️The date the property was sold
▶️December 31 of year of sale
▶️Partnership tax return due date (w/o extension) for the year of sale

A failed exchange creates almost infinite ways to achieve tax deferral, with incredible flexibility and optionality!

#1031exchange #costsegregation #sdira #resurefinancial

[1031 Exchange, Cost Seg, SDIRA/401k @BernardReisz]

Never use real estate tax tools to avoid taxes!

If you're using real estate tax tools to avoid paying the taxes on a single transaction, you're taking a view that is way too narrow and short-sighted!🤏

Here's the broad and long view:

Without 1031 exchange and Cost Seg, an investor has 20-40% less cash available to deploy on towards real estate acquisitions! 🤯

The impact of that is huge, as every dollar available for real estate investment gets multiplied 3-4x by leverage. Every $10,000 lost to taxes represents $40,000 of lost buying power! 🤯

The benefit of 1031 exchange and Cost Segregation is the ability to use all your money towards investing, rather than handing it over to everyone's favorite uncle.💸

Over multiple real estate sales and acquisitions, this compounding has a wealth impact of 1,000s%, either negative or positive, depending on whether you utilized real estate tax tools to your advantage.

Use real estate tax tools to buy more real estate!

#1031exchange #costsegregation #sdira #resurefinancial

[1031 Exchange, Cost Seg, SDIRA/401k @BernardReisz]

For a helpful and informative resource, click to read all about Deferring taxes with a failed 1031 exchange: https://t.co/TRWqJciGb9

[1031 Exchange, Cost Seg, SDIRA/401k @BernardReisz]

👉If a 1031 exchange started in 2024 "failed" in 2025, you may still get tax deferral.

👉When filing taxes for 2024, make sure your accountant is aware of any 1031 exchanges, even the ones that failed.

If a 1031 exchange straddles taxable years, capital gain is recognized in the year the funds become available to you (i.e., when the exchange period ends), not the in the year of the sale.

>If you sold property in late November or in December, your exchange straddles 2 years.

>If you sold property within the last 6 months of the prior year and ID'd 1031 replacement property, your exchange straddles 2 years.

👉When filing taxes for 2024, make sure your accountant is aware of any 1031 exchanges, even the ones that failed.

#1031exchange #costsegregation #sdira #TaxTwitter #resurefinancial

[1031 Exchange, Cost Seg, SDIRA/401k @BernardReisz]

Strategic and compliant 1031 ID is key to a successful exchange

For your 1031 Replacement Property to be "like kind" it must be IDENTIFIED before the end of the 45-Day Identification Period.

For a property to be "identified" in a 1031 exchange:
▶️ID must be provided on a SIGNED WRITTEN DOCUMENT
▶️ID must be hand delivered, mailed, telecopied, or otherwise sent. before the end of the identification period
▶️ID must be include UNAMBIGUOUS DESCRIPTIONS of the replacement property
▶️Replacement property actually acquired must be “substantially the same” property as that identified.

(Not to worry... the ID forms provided by ReSure, and most quality QIs, are formatted with helpful rules and tips, include a signature line, and identify the exchange to which the ID pertains.)

Although identification is nearly always made to the QI, the regulations do allow the identification to be made to other parties to the exchange. This could provide a fallback position if the identification made to the QI is late.

1031 ID must be approached strategically and compliantly!

Click the following link to access a comprehensive resource for 1031 ID Rules, Deadlines, and Helpful Tips: https://t.co/vTgIdhc7lF

#1031exchange #costsegregation #sdira #taxtwitter #resurefinancial

[1031 Exchange, Cost Seg, SDIRA/401k @BernardReisz]

Click to access an interactive 1031 exchange timeline calculator: https://t.co/sVt8hfBdN8

[1031 Exchange, Cost Seg, SDIRA/401k @BernardReisz]

📢Don't let the tax filing deadline end your 1031 exchange

👉If you started a 1031 Exchange towards the end of 2024, get a tax filing extension.

1031 Exchange Replacement property must be acquired during the exchange period, which ends at the sooner of:
▶️180 days from the date of sale
▶️the due date of the tax return for the year of sale

Unless a tax filing extension is obtained, an ongoing 1031 exchange started during 2024 ends at 3/15/25 or 4/15/25, depending on the type of tax entity the exchanger is.

#1031exchange #costsegregation #sdira #taxtwitter #resurefinancial

[1031 Exchange, Cost Seg, SDIRA/401k @BernardReisz]

@kjb_cpa Just had this convo w/ someone, explaining to them that by converting one type of income to another through pure artifice, for purposes of getting attractive bank financing, (aka bank fraud) may be riskier than tax fraud

[1031 Exchange, Cost Seg, SDIRA/401k @BernardReisz]

@EmDeeEm Ditto for giving your Cost Seg provider with all your renovation expenditures

[Matt Metras 🍕 cryptotaxpro.eth @EmDeeEm]

Tax Pro PSA: There is literally no situation, EVER, where your accountant will want a screenshot of your spreadsheet over the actual spreadsheet.
#TheMoreYouKnow #TaxTwitter

[1031 Exchange, Cost Seg, SDIRA/401k @BernardReisz]

@JWellsTax Love this! I'm in!

[1031 Exchange, Cost Seg, SDIRA/401k @BernardReisz]

Big Brother is making us dizzy! 💫

A CTA/BOI update for the dazed and confused🙃

👉Yes, the Supreme Court stayed the Texas Top Cop Shop nationwide injunction against enforcement of the CTA and BOI filing requirements.

👉Yes, compliance with BOI reporting requirements under the CTA remain voluntary.

👉There’s a separate nationwide injunction, issued in another Texas case, that remains in place.

Quick recap of recent CTA litigation👇

▶️12/03/2024 - BOIR OFF: Nationwide preliminary injunction blocking enforcement of the CTA. Texas Top Cop Shop, Inc. et al. v. Garland.

▶️12/23/2024 - BOIR ON: U.S. Court of Appeals for the Fifth Circuit stays the preliminary injunction.

▶️12/26/24 - BOIR OFF: U.S. Court of Appeals for the Fifth Circuit vacates the stay of the preliminary injunction.

▶️01/07/25 - BOIR OFF: Enforcement of the CTA is blocked by another judge, in another case, Samantha Smith v. U.S. Department of the Treasury.

▶️01/23/25 - BOIR: Supreme Court stays the nationwide injunction issued in Texas Top Cop Shop.

For more comprehensive coverage of the CTA:
https://t.co/K6CqMELvLx

#costsegregation #1031exchange #sdira #solo401k #resurefinancial #TaxTwitter #ReTwit

[1031 Exchange, Cost Seg, SDIRA/401k @BernardReisz]

How to Interpret (Misleading) Cost Seg Reports💫

Cost Seg Feasibility Studies are necessarily misleading, with  2 categories of assumptions baked into every Cost Seg analysis:
▶️Assumptions about your tax profile
▶️Assumptions about depreciable tax basis

For a helpful and informative resource: How to Interpret (Misleading) Cost Seg Feasibility Reports and Studies

https://t.co/mJFXUOBwB4

Assumptions are sometimes a necessary evil; still, you've got to know what they are so that you can adjust the "bottom line" to your personal reality.

👉Cost Segregation is the most powerful real estate tax tool available to real estate investors.

👉When making choices about Cost Seg, you need to be the most well-informed consumer you can be.

#costsegregation #1031exchange #sdira #solo401k #resurefinancial #retwit