Videos

Video - Seller Backed Financing in a 1031 Exchange

Seller-backed financing issues are coming up quite frequently so I thought I’d make a quick video to talk about when you’re doing a 1031 exchange and the buyer wants you to sell it to them on a contract for deed or with seller-backed financing. In a 1031 exchange, the seller wants to take all of their equity and reinvest it into a replacement property of equal or greater value, so they need to redeploy their cash. The problem with a lot of seller-backed financing arrangements is your cash isn’t released – it’s loaned to the buyer. Therefore, you’re not coming up with as much equity for redeployment into the replacement property. One easy way to fix this is to simply bring an equivalent amount of cash from your own pocket to the relinquished property closing and loan it to the buyer so that the net proceeds that go out to the qualified intermediary are the same as they ordinarily would be if there was a cash purchaser. We call this the “cash is king” solution. This is just one of many ways to approach 1031 exchanges involving seller-backed financing, but this is typically the easiest.

  • Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2023 Copyright Jeffrey R. Peterson All Rights Reserved

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Video - What Financial Planners & Investors Should Ask a DST Wholesaler or Syndicator

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In this video, we’ll be talking about what financial planners and investors should be asking about the DST from the wholesaler or sponsor that’s selling them the DST interest.  

  • Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2023 Copyright Jeffrey R. Peterson All Rights Reserved

Video - What are Capital Gains Taxes?

Capital gains is a form of taxation. It’s actually a preferred or lower rate than pay on your ordinary earned income. Capital gains in the United States at the time of this recording have a maximum rate of 20% for the ordinary appreciation that you enjoy on capital assets including real estate that’s held for investment or business purposes. Some gains are derived because you depreciated the property. Every year you took a depreciation deduction you took an incremental decrease in your basis. Over time you’ll whittle your basis down to zero on your improvements. That gain that’s calculated from your depreciation deductions is taxed at a higher rate of 20%.

  • Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2023 Copyright Jeffrey R. Peterson All Rights Reserved

Video - Related Party 1031 Exchange Transactions

In a 1031 exchange, a related party is determined in one of two ways. There are people you are in familial relations with (your mother, father, child, ancestral and lineal descendants, etc.) But it’s also people you’re in business with (your employee, agent, attorney, accountant, etc.) These are very complex rules and the net may be broader than you think when determining who is a related party. Since related party transactions are more complicated and sophisticated, it’s important to know who is a related party. It’s a good idea to consult with a tax accountant or attorney if you’re engaged with someone you’ve done business with or that you’re related to by family relation.

  • Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2023 Copyright Jeffrey R. Peterson All Rights Reserved

Video - Can a Foreign Person Purchase US Real Property?

Anyone can buy property in the United States, even foreigners. But, subject to certain limitations, when you sell the property, if you’re a foreign person there may be withholdings required where the buyer has to withhold a certain portion of the proceeds because it has to be available to pay the seller’s US property tax liability from the sale. This may complicate a foreign person’s sale of a property but generally speaking, foreign people can buy US real property. It’s just that things get a little bit more complicated when they go to sell the property.

  • Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2023 Copyright Jeffrey R. Peterson All Rights Reserved

Defer the tax. MAXIMIZE your gain.