All Forum Posts by: Braath Waate

I own property and have no children or real persons that I want to inherit my property after death.  I do not want to use a will or trust to designate inheritance after my death.  Instead, I have established a donor advised fund (DAF) for charitable giving during and after my death.  Setting the DAF to be the beneficiary of liquid assets is simple.   It is also simple to use a beneficiary deed (transfer-on-death) for real property.

However, if there is no named executor of my estate (no will/no trust), how would the DAF be notified of my passing and the existence of the beneficiary deeds?  Is there a death notification service in the US that would do this (I couldn't find any)?   I would rather not have to rely on asking some random unrelated person to have this responsibility.

OK, that makes sense.

I went ahead to sign up, and got a listing agent assigned. However, it does not appear that there are any listing agents that use the primary MLS in my area, Grand Junction MLS. There are agents that will list the property using REcolorado, a secondary MLS.

I see that Chery Bradley was or is a member of REcolorado.

How important do you think is listing on the primary MLS versus a secondary MLS?

After some research I've learned that most flat fee MLS listing services charge an additional 0.5% due at closing in Colorado (specifically, Grand Junction). What I couldn't find out is how that closing fee is enforced. Do they require signing a Exclusive Right To Sell contract? If not, and I find a buyer and close the transaction myself with my favorite title company, would I have to pay that fee?

As an experiment, I set up a listing with houzeo, and got to the point where they want my credit card, but they didn't require signing any contract up to that point.  So I'm mystified as to how this 0.5% closing fee is enforced.

Great thought that the basis should have been already established because the house was correctly a depreciable asset.  But I elected not to claim depreciation on the house and never declared it as a depreciable asset on any business tax forms.  (That would have been a mistake had the asset actually depreciated, precluding any claim for loss, but it didn't.)  Thus there will be no depreciation recapture on its sale.  There will be a capital gain.

The house was not a prior rental. The local tax authority considered it integral to the farming operations as a management residence and taxed the entire property as agriculture.  The contract verbiage of the original 1031 exchange specified the property in whole, not any portion.

Going forward, it would appear to me that now I need to retroactively establish the basis in the respective property, now subdivided. And determine how to allocate the amount from original 1031 exchange and the amount added to complete the sale.  If accounting rules permit flexibility, I will allocate the amount from the 1031 exchange to the house so that its capital gain will disappear under the home sale exclusion rule.   (Although not pertinent to the discussion, the future sale of the subdivided land will continue its basis in a further 1031 exchange).

25 years ago I bought an income producing farm with land and a house.  I used a 1031 exchange from another business property to pay for it partially.  I lived in the house.

Skip ahead to today.  I subdivided the house off from the land.  But how to assign the original 1031 exchange basis to prepare for sale?

Do I have the freedom to assign the 1031 exchange basis between properties as I determine? If so, I think I should assign the entire 1031 basis to the house, and the rest of the money I spent to the the subdivided land.  Because I lived in the house for more than 5 years, the IRS rules seem to allow the 1031 exchange capital gain to disappear in the home sale capital gains exclusion ($250,000/$500,000), which is a nice loophole.

Or would the IRS require me to allocate the original 1031 exchange basis between both properties?  If so, how?

Caveat.  The sale of the subdivided land and the house will probably not occur within 2 years of each other, so the IRS will not consider the appreciated land as part of the home sale.