James Brennan's (jamesbrennan2) Blog

Services for Real Estate Pros - ES Group
The use of trusts in asset protection is quite popular but the distinctions between a revocable and irrevocable trust are important to understand. In an irrevocable trust, possession of the asset is transferred to an independent trustee; the original possessor is no longer tied to them. Thus, for...
For those who own interest in oil & gas wells, mines, timber, mineral deposits or reserves, and other natural deposits the IRS provides a deductable “depletion allowance”. An easy parallel can be drawn to depreciation, the end result being a deduction due to the erosion and “cost recovery” of the...
In the hit show I Love Lucy, Ricky Ricardo was known for saying “Lucy, you’ve got some ‘splaining to do!” in his memorable Cuban accent. With 1031 exchanges the ‘splaining is done by substantiating your tax positions with other financial and Tax documents. The best case of substantiating comes wi...
Simply speaking a zero transaction is the acquisition of a property using a highly leveraged loan (loan to value usually 88% plus) with all rental income dedicated towards debt service, thus producing “zero income” for the property owner. One of the vehicle’s applications is to defer tax liabilit...
When you think of tax planning you think of someone who looks forward to helping you navigate your facts, circumstances and decisions, minimizing the tax liabilities of your investments and business operations. Unfortunately, many CPAs that advise clients look backward, reacting to the year’s ev...
1031 exchanges include a 180 day exchange period unless you started your exchange in the previous year, say 2009, and April 15th cuts short your 180 period. If this is the case you must file for an extension to get the full 180 days. NOTE: All 1031 exchanges must be filed on IRS Form 8824. For Fo...
It has been recently reported that the US apartment market may have reached bottom and be poised for a rebound. Apartment vacancy rates have stopped rising and rents even showed a modest increase in the first quarter. As life is pumped back into this market, 1031 exchanges could subsequently ris...
Unsuspecting commercial investors are driving to the bank to turn in their keys on projects that did not workout as planned and waking up the following year with an unexpected tax headache. The discharge of the loan can result in a capital gains tax liability. Not only did the clients lose whatev...
For those who saw their exchange funds evaporate due to a QI declaring bankruptcy, yet still owed taxes on capital gains, Rev. Proc. 2010-14 may provide a much needed solution. Previously, taxpayers who fell victim to a QI default, were obligated to recognize the “gain triggered upon transfer of...
There are times when an investor may want to sell one of his properties and invest its proceeds in another he owns. In the past the IRS forbade 1031 exchanges in such cases, however, today there are means around it. It is known as an “advanced built to suit” transaction and though it has never b...

James Brennan

JD/LLM, 1031 Exchanges
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