All Forum Posts by: Joe Vesey

The Master Lease is in place as the the Trust itself is not allowed to enter into new leases (obviously an issue in multifamily property). The Master Lease has to be viewed as a true lease (vs a partnership) or it may not hold up to IRS requirements. I view this as DST sponsors trying to abide by the rules and requirements of the IRS, not pulling the wool over anyone's eyes. IMHO.

0 Votes

Are you eligible for a Solo 401k? The UDFI does not apply to a Solo 401k.

0 Votes

You need to get the 1031 exchange set up PRIOR to closing on your relinquished property. The other option, if you need to purchase your replacement property prior to selling your relinquished property, is a reverse exchange. A reverse exchange is more complex and expensive. @Dave Foster could assist in more detail.

Good luck!

0 Votes

Worcester, Massachusetts

John Woodrich, CPA, MBTWork - 952-373-1022 - ** New Phone number **www.remotetaxservices.net
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1 Vote

Minneapolis, Minnesota

There is a local group here in Minneapolis that may be a fit. Send me a note and I can give you their contact info. I have worked with them, but you need to do your own due diligence.

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Hi Ann,

I specialize in assisting exchangers to find effective passive options. After discussing a client's preferences, goals and cash flow expectations, an advisor should be able to provide several offerings that meet your requirements. Please let me know if I can answer questions or assist.

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Quote from @Danielle Davis:

My husband and I are both doctors and have high six figure income from our practices. However, most of our income comes from managing other doctors working for us rather than us personally working clinically in our offices (AKA much of this income is passive profit distributions at this point).

We pay an insane amount of taxes and are trying to figure out creative strategies to lessen our tax burden. We have 2 under 2 and recently sold a large portion of our practices so we expect our income from that to be reduced significantly in the next year or two. My husband has another venture that will likely be $1M plus in income/distributions/year while I was considering starting to do some real estate. Our thought is that I would be a real estate professional and purchase assets we can depreciate in year 1 to offset the high taxable income from my husband.

My questions are: do I need to have a real estate license to be considered a real estate professional? Does it matter if I still have six figures of income from my practice? (We would put all the real estate in my name). There seems to be a great deal of conflicting information regarding REP status. Any unforeseen problems with this tax strategy? TIA!

If your income is passive, and you are discussing this w your tax advisor, there may be options other than becoming a real estate professional. Please let me know if you'd like additional information to see if it may be a potential fit for your situation. Please do not consider this tax or investment advice.

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If you don't need the cash, then a 1031 exchange could be a better deal in my opinion. Your Federal Capital gains are typically 15 or 20% and depreciation recapture is 25% of the amount that you depreciated the property while you owned it. Always discuss w your CPA to make the best decision for your specific situation.

4 Votes

Dallas, Texas

Quote from @Benjamin Aaker:

Hi Jacob,
Welcome to BP. It's always great to see another healthcare provider looking at real estate investing. The 1031 was a genius idea to get investors to do something. The government encourages investing and 1031 helps motivate us to make a move. The 45 day time limit to identify 3 properties pushes us forward. The down-side is that it can encourage us to make a bad purchase. Remember that you can identify 3 properties but have 180 days to purchase any one of them. There's no downside to identifying 3 properties on day 45, even if you don't end up purchasing them.
The tax benefit is nice, but not nearly worth making a bad purchase, so do your diligence and be comfortable with losing the 1031. I've had this happen before and I've completed a 1031 before. It is pretty nice when it works out. Good luck.

If you ID a property and then get past day 45, the QI is required to hold on to your exchange funds until you acquire the identified property, or until your 180 days expires. Just something to be aware of.

1 Vote

San Antonio, Texas

Quote from @Jacob Brooks:

That is what I am beginning to realize might happen, and brings up an excellent question I just started to think about. That would be, if the time runs out, what happens next? Since you have some experience with this, any information you can give?

Hi Jacob,

I specialize in helping 1031 exchange clients find passive investment solutions (if they are not able to or don't want to find real estate that requires active management). May be worth a call to see if we may be able to assist you.

2 Votes

San Antonio, Texas

All Forum Posts by: Joe Vesey

Joe Vesey has started 0 posts and replied 63 times.

Post: 1031/DST/UPREIT (I can't verify the value)

Post: Effect of depreciation recapture on UDFI calculation

Post: 1031 exchange to be Done in Massachussettes

Post: Cpa Minneapolis MN

Post: LP Syndication Recommendations who Accept 1031 Exchanges

Post: DSTs - How much time involved?

Post: Cost Segregation to Reduce High Taxable Income

Post: Considering selling a rental property in Texas

Post: Starting My Investing with a Time Crunch

Post: Starting My Investing with a Time Crunch