Current STNL Newsletter
1031 Exchanges Remain Great Investor Strategy By Nancy Miller, CCIM
The IRS 1031 exchange is used by many investors to defer, not eliminate capital gains on their investment properties. It remains a great strategy for first time and repeat investors, but must be employed correctly.
First time investors of qualified “like kind” assets (land, building, timber, or other non-primary residence) that has a very low basis are ideal candidates. Here are two examples:
#1 Mike and his family sold a small commercial building in Manhattan that has been in the family since the early 1900’s to a developer who offered them well over $10M. Their “basis” or original cost plus capital expenses was around $500K. In order to defer the long term capital gains, they decided to use the IRS 1031 exchange strategy and purchased several NNN investment properties equal to the sale of the building. The gain is rolled into the new investments until a later time.
#2 Another buyer, Ernie in Detroit owned a NNN leased Aarons Rents in Georgia. Bull Realty listed and sold the net lease property for him. Since he originally acquired the Aaron’s as part of a 1031 exchange, he wanted to roll the appreciation into another investment property. We identified and he purchased a new construction Family Dollar in Louisiana. Again, he deferred, but did not eliminate the gain.
There are many “do’s” and “don’ts” to comply with the regulations of 1031 exchanges that are very specific. Investors are always advised to contact their tax advisor or a 1031 intermediary, especially PRIOR to the sale of the “relinquished” property or they will be disqualified from the start.
Starbucks' Answer to Trump Ban: Hire 10,000 Refugees
QSR's Starbucks' Answer to Trump Ban: Hire 10,000 Refugees Starbucks CEO Howard Schultz sent a letter on Sunday to all employees addressing the recent executive order signed by President Trump that bans refugees from certain countries from entering the U.S.
Wal-Mart announced on CNBC that it plans to layoff and eliminate approximately 7000 back office jobs at US stores this year to operate more efficiently and effectively. These are planned by the end of January.
Gas Prices Rise along with Consumer Optimism Consumer gas prices are up 11 cents/gallon in January 2017 to $2.30 per gallon according to the National Association of Convenience Stores (NACS). One would think that consumers would react negatively. However, for the 3rd month in a row, the Consumer Fuels Survey, conducted by NACS shows that the majority of fuel consumers remain optimistic. Most consumers (56%) anticipate that prices will continue to climb in the next 30 days. Jeff Lenard, VP of Strategic Initiatives for NACS says that “strong economic sentiment may help continue to push sales at convenience stores and other retail outlets.” Read more
Lowe’s New Marketing Head: Exec Changes: Jocelyn Wong, former Senior VP and Chief Marketing Office, of Family Dollar is tapped to take the top marketing position, Chief Marketing Officer, at Lowe’s. She succeeds Marci Grebstein in that position. Prior to that, she worked for other retail brands including Safeway and Proctor & Gamble. Source: Chain Store Age
Fred’s promoted COO, Michael K. Bloom to chief executive effective 2/17. Bloom joined Fred’s in January of 2015 from Family Dollar. Prior to that, he held executive positions with CVS for 20 years.
DO YOU KNOW why are gas prices so high in California and so cheap in South Carolina? Answer: Federal excise taxes and other gas taxes vary by state. California has the highest and SC the lowest combined taxes. Also, California has unique fuel blends, not required elsewhere. Guess what – they have to be barged in and are susceptible to outages. Source: 2016 NACS Retail Fuels Report