Installment Sales

By completing an installment sale, this will allow the Seller to defer recognition of the gain on some sales of real property.

With a few exceptions, the installment sale method is currently allowed only for “non-dealer” sales. Losses cannot be reported using the installment method.

The installment method is generally positive for a taxpayer because it means paying taxes on a current sale in future years, as payments are received by the Seller from the Buyer on the financing they have carried from the sale. It also moves the income into later years when there may be other losses to offset the gain.

What is Cap Rate?

  • How do you know what a commercial income property is worth?
  • How do you know that you can get your desired return on your investment?
  • Is there a way to calculate the maximum you can pay for an investment and still achieve your investment goals?

Many real estate investors determine the value of an income property by using the capitalization rate, aka cap rate. It is probably the one most misused concept in real estate investing.

1031 Tax Deferred Exchanges

Exchanges

An Exchange is a transfer of property for other like-kind property.

Summary of 1031 Exchange Law

When property is held for use in a trade, business, or investment is exchanged for property held for the same purpose (like for like), no gain or loss is recognized.

2018 Update

The 1031 Exchange has essentially survived tax reform. There is one noticeable change going forward. Personal property such as art work, aircraft, collectibles, etc. will no longer be exchangeable. However real property will continue to be exchanged and there have been no changes to the 1031 Exchange Rules as we know them.

Purchase Money with Subordinated Debt on Commercial Property

What is ‘Subordinated Debt‘? Subordinated Debt is a loan or security that ranks below other loans and securities with regard to claims on a company’s assets, their earnings or real property and in this case study, the real estate is the asset Subordinated debt is also known as a junior security, junior liens or subordinated loan.

Real estate debt is also classified as first and second liens or junior liens, but the junior liens are also “subordinated debt”. Why? Because it is subordinated to all other senior liens on the property.

Housing Puts Australian Banks At Risk

For years investors have been calling the Australian housing market a “bubble” yet the prices keep going higher. Is the other shoe about to drop in the Australian property market?

The Australian property market has been skyrocketing since 2012, up over 80% in Sydney while Melbourne has increased over 54%. In turn houses have become non affordable for many in Australia, as property values continue to outpace income growth. An average home in Sydney now costs more than 12 times the median income according to Demographia, a research firm.