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Local News & Opinion
01.26 Local Democrats Invited to Brainstorming Session on Sun., Jan. 31 Ref. : Local Newsbriefs Travel
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Video National Health Care Systems In Other Countries 02.03 Drugmaker Got Kickbacks for Nursing Home Patients 01.18 Drugmaker Got Kickbacks for Nursing Home Patients Media Watching
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01.25 Thinking About Fictions 01.24 US Democracy's End of the Road 01.22 Editorial: U.S. Supreme Court Nails Down the Coffin of Democracy 01.22 Security Fools US Politics, Policy & Culture
02.09 Growing Hunger in America 02.08 The US Government has Lost its Reason for Being 02.08 Thinking About Oracles 02.06 No Direction Home: Pakistan and the Imperial Principle 02.04 Howard Zinn and the State of the Union 02.04 The US Supreme Court: Vanguard of Friendly American Fascism? 02.04 The New War Against Money 02.04 David Brooks Goes After Greedy Geezers 02.02 Obama's Budget Ducks Pentagon Cuts 02.02 Budgets, War and Blind Ambition: The Limited Minds of the American Elite 02.01 Thinking About Definitives 02.01 Remembering Howard Zinn (1922 - 2010) 01.29 American History 101: We Are Devo 01.29 Obama's Outreach to Americans: Empty Rhetoric, Business As Usual 01.28 The Supreme Court's Partisanship 01.27 Freeze Frame: Flopsweat and Farce in the Hollow Halls of Power 01.25 Granny D on Campaign Finance Reform 01.25 S.C. Republican’s Plan: Starve the Poor So They’ll Stop “Breeding” 01.23 It's Time for Kucinich, Conyers, Feingold and Other `Progressives' in Congress to Take a Stand 01.21 Massachusetts' Message of Stupid 01.21 Terrorism Defined: Bill Clinton Lights Our Way to Truth 01.21 How Obama Lost His Way 01.21 Political Earthquake Rocks Massachusetts 01.20 Obama Cuts Deal that Will Reduce Social Security, Medicare and all Entitlements 01.20 Critical Mass: Dem Agenda Opens Right-Wing Doors 01.19 Outsourcing War: The Rise of Private Military Contractors High Crimes?
01.25 The Silence and the Shield: Depraved Indifference to the Atrocities of Power 01.19 Dark as a Dungeon: A Brutal System Stripped Bare Economics & Business Non/Mis/Malfeasance
02.07 AIG-Gate: The World's Greatest Insurance Heist 02.06 The Free Market Fetish 02.04 The Crisis is Not Over 02.03 States Face Worsening Recession with Health Care Funds on the Chopping Block 02.02 Rule by the Rich 01.29 The Battle of the Titans: JPMorgan vs. Goldman Sachs 01.27 State of the Union: Obama’s “Automatic IRA” Plan Could Make Bush’s Wildest Dreams Come True 01.26 Obama, Read Your Reagan on Capital Gains Taxation 01.24 Funding Public Health Care with a Publicly-Owned Bank: How Canada Did It 01.18 Thinking About Accelerants International
02.08 Aafia Siddiqui: Victimized by American Injustic 02.07 Annals of Liberation: Obama Surge Driving Thousands From Their Homes 02.05 Human Rights Abuses in Israel and Occupied Palestine 02.03 Child Slavery in Haiti 01.30 Blood is His Argument: Tony Blair's Gentle Cuddling at Iraq "Inquiry" 01.28 Obama Ignores Key Afghan Warning 01.27 Haiti's Earthquake: Natural or Engineered 01.26 Helping Haiti’s Elders 01.26 Focus on Israel: Harvesting Haitian Organs 01.25 Focus on Haiti: Washington's Militarized Takeover 01.22 The Lessons of Boycott, Divestment and Sanctions 01.18 Disaster Capitalism Headed to Haiti We are a non-profit Internet-only newspaper publication founded in 1973. Your donation is essential to our survival.
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CONSUMER INFORMATION:Why '1031 Exchanges' Interest InvestorsSince 2002 IRS clarifications, 1031 exchanges can now be used by tenants-in-common (TIC)
With the recent run-up in real estate prices, investors are looking for ways to defer capital gains taxes. Unlike a primary residence, where a $250,000 exclusion amount may apply if certain criteria are met, the individual investor is left with few alternatives to avoid taxation. However, Section 1031 of the IRS Code may provide just what the individual investor is looking for.Because of 2002 IRS clarifications, the 1031 exchange has become a very popular option for many real estate investors. A 1031 exchange (named after Section 1031 of the IRS code) is not a new idea. It was created in 1921 in order to allow for a reciprocal transfer of certain types of property. In the past, abiding by the very strict requirements of the 1031 caused investors to choose other options when selling their real estate. Now, with Tenants-in-Common (TIC) ownership, the popularity of the 1031 has been increasing significantly. Since 2001, the amount of money invested in TICs has roughly doubled each year. It is believed that TICs will reach more than $5 billion in 2006. A 1031 exchange is usually a three-way delayed exchange in which an intermediary is used to facilitate the transaction. There are four basic steps:
The power behind the TIC Heirs receive a stepped-up basis on the TIC investment, potentially eliminating capital gains taxes altogether.
One driving force behind the increase in TICs is the ability to defer taxes on the gains from the sale of certain types of property, while taking advantage of the recent real estate boom in highly desirable areas. Another driving force is TIC investors typically become owners of high quality commercial or industrial property. Thus, the owner becomes a passive owner, which means no 2:00 am phone calls that the toilet is clogged or the heater broke. A third benefit is TIC investors can receive monthly income from their investment while still having the potential for appreciation of the property. Lastly, heirs receive a stepped-up basis on the TIC investment, potentially eliminating capital gains taxes altogether.There are risks involved While a TIC investment provides many benefits, you should also be aware of the risks and limitations of such an investment. TIC interests are not freely transferable, and there is no secondary market for these interests. Cash distributions and potential property appreciation are not guaranteed. Also, investors in a TIC are subject to the typical risks of real estate ownership such as economic influences, occupancy rates, and tenant risk. Some Dos and Don’ts
Benjamin Hoffman is Vice President of Investments for H&R Block Financial Advisors located in the firm’s Timonium, Maryland office. He may be reached at 410-308-6108 and bhoffman@hrblock.com.
Copyright © 2006 The Baltimore Chronicle.
All rights reserved. Republication or redistribution of Baltimore Chronicle content is expressly prohibited without their prior written consent. This story was published on June 21, 2006. |
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