Tax Deferral Real Estate Strategies

Advisors who are knowledgeable about 1031 exchanges and who can help clients with their real estate investment property transactions are often better equipped to grow their businesses than advisors who are solely focused on traditional investment management.

That stands to reason because, for many clients, their real estate investment properties represent a significant portion of their overall net worth, and they may prefer to work with advisors who offer comprehensive financial planning that takes all their assets into consideration. The Inland Academy is committed to helping you grow your knowledge of 1031 exchanges, Delaware Statutory Trusts, and Qualified Opportunity Zones so that your client base and AUM can grow as well.

 Choose a module to the left to watch each video.

1031 Exchange Overview

Section 1031 of the Internal Revenue Code provides an alternative strategy for deferring the capital gains tax that may arise from the sale of a business or investment real property. By exchanging real property for like-kind real estate, real property owners may defer Federal tax obligations and apply all the proceeds toward the purchase of replacement property.

What Is 1031 Exchange
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1031 Fact Sheet (Defer Capital Gains with a 1031 Exchange)

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Benefits of a 1031 Exchange

As an advisor, you know that several of your clients have holdings in real estate, many who’s investments may exceed the amount of assets they have under management with you. A 1031 exchange affords you the opportunity to help your clients make the most of these investments and offers them several valuable benefits they may not be fully aware of.

Some of these benefits include:

  • Tax-deferral
  • Diversification
  • Increased Income
  • Improved Purchasing Power
  • Reprieve for Landlords
Benefits of a 1031 Exchange (1)
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1031 Fact Sheet (Defer Capital Gains)

The 1031 Exchange Process

There are several important aspects of the exchange process that are worthy of your attention and understanding including the three basic steps of a 1031 exchange and the identification rules to ensure a successful exchange.  In this video we take a deep dive into both of these and provide you with the knowledge you need to complete an exchange.

The 1031 Exchange process
COIs and the Exchange Process

Because 1031 exchanges can be considered somewhat complex transactions for investors and must be completed in accordance with highly defined regulations, they require the guidance of skilled professionals.  Like yourself, each of these professionals has their own client base and 1031 exchange opportunities can occur with any member of this team. So, as you strengthen your relationships with these key individuals, you’ll begin to see the benefits of not only using their expertise on exchanges where you are the lead participant, but also enjoying the additional volume of exchanges where they’re seeking your expertise.

COIs and the exchange process
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DST Overview

By definition, a DST is an entity that is used to hold title to investment real estate. A properly structured DST that owns a property will qualify as like kind exchange property for a 1031 exchange, according to the IRS revenue ruling 2004-86. DSTs are often considered a structure of choice for those looking to diversify their investments and enjoy the benefits of fractional ownership opportunities.

DST Overview
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DST Benefits

This module explores the many benefits a DST provides, as well as an overview of the type of investor best suited for considering a DST.

  • No Management Responsibilities
  • Access to Institutional-Quality Properties
  • Limited Personal Liability
  • Diversification
  • Estate Planning
  • Lower Minimum Investments
DST Benefits
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Utilizing DSTs in a 1031 Exchange
Using a DST as Part of Your Financial Planning

Consider that 58% of high net worth individuals have more than 10% of assets allocated to commercial real estate. Utilizing DSTs in a 1031 exchange creates an opportunity for the financial advisor to provide advice on this specialized asset class, potentially increasing their assets under management.

Using a DST as Part of Your Financial Planning (1)
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Utilizing DSTs in a 1031 Exchange

Marketing DST's: How RIAs Stay on the Right Side of Compliance

Advisors can prospect for clients with private placement investments, like DSTs, using social media in a manner that doesn’t require mountains of additional work.

How RIAs Stay on the Right Side of Compliance
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Qualified Opportunity Zones: A Primer

The qualified opportunities zone (or QOZ) program may provide substantial tax benefits for investors if certain tax requirements are met.

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Qualified Opportunity Zones: Before You Invest

6 Real Estate Investment Tips to Consider Before Adding Qualified Opportunity Funds (QOZs) to your Portfolio

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