Retiree Havens Turn Younger to Combat the Housing Bust Wall Street Journal - For Sheldon Behr, buying a condo in Century Village East has meant the chance to live out his retirement years with other older adults who enjoy golf, ...
Home truths for Mr Stevens Sydney Morning Herald, Australia - A mortgage broker and financial adviser, Michael Mezrani, said more people were coming to him for advice about their shrinking retirement nest eggs. ...
A nation's new frugality Indianapolis Star, United States - The housing bust, credit crunch and stock market plunge have eaten away at the retirement savings and confidence of consumers who for years operated on a ...
Holiday season off to a modest start The Associated Press - NEW YORK (AP) ? The Thanksgiving shopping weekend doesn't appear to have been the disaster some had feared, but consumers' tempered buying and stores' ...
Besheer and Wolfe: Financial planning for the future The Saratogian, NY - The following suggestions could make the difference between keeping and losing your home or buying your first home versus continuing to rent. ...
Musicians retirement home to close News Shopper, UK - 44 minutes ago PENSIONERS and staff are outraged that the only retirement home for musicians in the country is to close. Ivor Newton House in Edward Road, Bromley which ...
Retirement community to add upscale homes The Patriot-News - PennLive.com, PA - BY MONICA VON DOBENECK Hill Farm Estate, a retirement community north of Annville, plans to quadruple its size and offer a variety of upscale homes, ...
To Be Old, Frail Wall Street Journal - In recent years, assisted-living facilities have sprung up as alternatives for those who don't quite require nursing-home care but want or need assistance ...
Probe of MCCCD retirement deals nears end East Valley Tribune, AZ - However, since employees of those private groups are listed as district employees, they qualify for state retirement benefits that are supposed to be ...
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PREVALENCE OF ALZIIEIMER'S DISEASE IN A RETIREMENT COMMUNITY - RI PFEFFER, AA AFIFI, JM CHANCE - American Journal of Epidemiology, 1987 - Oxford Univ Press ... Printed in U.SA. All rights reserved PREVALENCE OF ALZHEIMER'S DISEASE IN A RETIREMENT
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[BOOK] Fun City: An Ethnographic Study of a Retirement Community J Jacobs - 1974 - New York, Holt, Rinehart and Winston [1974] -
Adverse reactions to amantadine prophylaxis of influenza in a retirement home. - KC Stange, DW Little, B Blatnik - J Am Geriatr Soc, 1991 - ncbi.nlm.nih.gov J Am Geriatr Soc. 1991 Jul;39(7):700-5. Adverse reactions to amantadine prophylaxis
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Buying A Retirement Home With Little Cash, No Taxes
You may be thinking about an upcoming vacation, but Ed Horan is thinking about vacation home purchases - and how to save real estate investors big taxes on them.
Of course, Ed Horan is almost always thinking about saving somebody taxes on real estate. That's because he's one of a tiny, loosely knit group of real estate professionals who do nothing but arrange tax-free property exchanges nationwide. Based in Haymarket, Va., Horan is what the Internal Revenue Service calls a "qualified intermediary" under Section 1031 of the federal tax code.
Horan says his firm, Realty Exchange Corp., handled about $27 million worth of exchanges in the past year - often involving urban dwellers who want to buy a home at the beach, a ski resort condo, a lakefront cottage or a resort-area getaway that will eventually turn into a retirement house. The buyers all want to have their cake and eat it, too. They want to spend little or no cash out of pocket for their new houses, and they want to pay no federal taxes whatsoever.
Under Section 1031, they're allowed to. Owners of investment or business real estate don't have to pay Uncle Sam capital gains taxes when they dispose of their property, even if it's quadrupled in value and is loaded with otherwise taxable profits.
All they have to do is roll over those gains via an exchange into "like kind" real estate. The exchange need not be a direct swap. Most exchanges, in fact, feel like traditional sales and
purchases to the participants involved. You sell one property to a regular buyer, listing it as an exchange property. The buyer can use it any way he or she desires. The cash proceeds go into an escrow, and are later used to pay for a replacement property, once you've located it.
The replacement real estate merely has to fit the IRS' broad definition of "like kind." You can buy a vineyard in Oregon by swapping away your rental house in Key West. You can acquire an apartment building in North Carolina after selling vacant land in Colorado.
The deal stays tax-free as long as you accept no cash in the process and your replacement property's acquisition cost is equal to or greater than the selling price of the property you sold, less expenses.
Here's how vacation home buyers are using Section 1031. Say you've owned a modest rental house in the suburbs for a number of years. Happily for you, it's increased in resale value from the $100,000 you paid for it to $150,000 today. For simplicity's sake, say your potential capital gain tax exposure on your sale profits, including depreciation you wrote off, comes to about $60,000.
Depending upon where you live, your federal and state tax liability on your $60,000 capital gain might come to 35 percent, including 28 percent federal capital gains and 7 percent state tax. That's a hefty $21,000 out of pocket.
How to save that money? Buy a condo, cabin or house at your favorite resort - one that has a reasonably strong rental market. If the sale and purchase "legs" of the transaction are properly documented to qualify as a tax-free exchange, you can leverage your proceeds into the purchase of a $200,000 or $300,000 luxury unit - and owe Uncle Sam not a cent next April.
Horan says rollovers of urban rental property into resort vacation property swaps "are the number one most popular form of tax-free exchange" among the predominantly small-scale property owners and investors he deals with. Swappers' tastes depend upon where they live. Clients who live and own rental property in or near Denver, for example, almost all want to move their tax-free profits into the mountains - "ski resorts are hot," no matter the season, he says. East Coast owners, by contrast, tend to head for the beaches - especially in the Carolinas.
Virtually all of them plan to make personal use of their units to the maximum allowed for investment property under the tax code: Fourteen days a year or 10 percent of the number of days the unit is rented at a fair market rate during the year. They also get to make "maintenance" visits to repair or keep the property in shape for rental.
Down the road a few years, some owners expect to convert the new unit into their full-time residence - thereby linking 1031 exchanging with retirement and estate planning strategies.
Qualified intermediaries provide the step-by-step exchange agreements, contracts, escrow accounts and related services to pass muster with the IRS. Fees vary from firm to firm and often depend on the complexity of the deal. Prices range from $750 upward. Besides the qualified intermediary, you'll probably also need to consult your tax adviser or accountant, plus pay standard realty fees to brokers at each end.
