Income taxes due from depreciation recapture can not be deferred into the following income tax year and are due in the taxable year in which the Investor disposed of (sold) his relinquished property.It will depend on whether the Tax-Deferred Exchange Agreement used by the Qualified Intermediary for the Investor’s tax-deferred like-kind exchange transaction includes the required language contained in Section 1.1031 of the Department of the Treasury Regulations prohibiting access to the 1031 exchange funds until the following income tax year.The ability to defer the recognition and reporting of the taxable gain into the following income tax year depends on when the Investor has the right to obtain access to or receive the benefit from his 1031 exchange funds.For example, if an Investor disposes of his relinquished property as part of a 1031 exchange and the relinquished property disposition closes on December 1 of any taxable year, the 45 calendar day identification deadline and the 180 calendar day exchange period are both in the following income tax year.

They certainly do deserve the recognition for their contributions!

Imagine in your mind how you will feel when you have done 10-20 deals, how will you talk to people, how will you carry yourself (posture, facial expressions, tonality of voice).

This defers the recognition of your capital gain over the term of the note on a prorata basis as principal payments are made.

Depreciation is also an "after the fact" recognition of the expense, when you SHOULD be reserving for it in advance by dividing the cost of a new roof or mechanicals by 15 years to get an annual "charge" that you are setting aside (or more if the items are already fairly old when you buy).Not saying those you know are fudging the numbers, but just be aware that there is an understatement bias on the part of the typical investor.All that said, you have <1% prop taxes and are in a high rent range in a generally good area with good tenants, so based on this I think I could rationalize 45% for vacancies/expenses, or perhaps just 30% if doing the management AND leasing.

Btw, thanks for the recognition Brandon Turner!

You'll need to start "managing" your taxable income recognition -up not down (i.e. capitalize stuff instead of expensing it, for example).

I suggested he get his license and use his name recognition as an agent for the area besides being an investor.

Thanks for the recognition Martin CS.

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