Delaware Statutory Trusts

The Delaware Statutory Trust (commonly known as the DST) is, as the name suggests, a legal entity created as a trust under the laws of the state of Delaware. A DST is created for real estate investment purposes and is particularly useful in a 1031 exchange.

In the context of a TSD, investors each have a proportional share of the TSD itself. The DST, in turn, holds the rights to various real estate interests and distributes to investors the potential income from the properties (in the form of rental income or the sale of the property) in proportion to their share of ownership in the DST.

The DST, through its signatory trustee, makes all decisions relating to the property held by the trust, freeing investors from this responsibility. One important thing to note about the summer time is that the trust is not considered a taxable entity. As a result, all profits or losses are transferred to investors in the trust.

With respect to 1,031 exchanges, the IRS has determined that any beneficial interest in the DST is treated as identical to a direct interest in real estate. This means that the properties held by DST fully fulfill the requirements for 1031 exchanges, provided that the other requirements of such exchange are also fulfilled.

For investors who do not seek accountability for day-to-day management and real estate decision-making authority, a TSD may be an excellent choice.

Benefits of a DST

One of the main reasons why investors are so interested in buying an interest in a TSD is the advantage of owning securitized real estate. However, a DST also provides other benefits to investors.

Eliminates the requirement of unanimous approval

Unlike a common rental ownership structure, a DST does not require the unanimous approval of all investors for making decisions about the real estate held. For example, if the economic environment requires the prompt sale of a parcel of land owned by the DST, the decision-making power to register or sell the property belongs to the DST&39;s signatory trustee rather than to the property. to the investors themselves.

Limited personal liability

Due to the "bankruptcy" provision of each hour of hour, individual investors enjoy limited liability with respect to their personal assets. In case of bankruptcy and failure of the DST, the biggest risk to an individual investor is his investment in the trust. The creditors of the trust can not reach any other assets of an investor.

Simplified financing

In order to finance the purchases made by the DST, the lenders treat the DST as a single borrower (rather than scrutinizing each individual investor). This makes financing easier and less expensive to obtain. Similarly, since the individual investor is not subject to credit screening, his individual rating is not affected by participation in a DST.

Requirements for loan forgiveness

Since the rights of a DST investor are limited to receiving distributions and the investor has no voting rights in connection with daily operations, the investor fraud exceptions are eliminated for individual investors. Any lender will only turn to the trustee or signatory sponsor for these waivers.

Lower minimum investment

A DST is allowed up to 499 individual investors, which allows the minimum investment amounts to be well below those of an ICT (allowing only up to 35). This allows investors with fewer investments to continue to participate in a shared ownership strategy for real estate investments.

Risks of a DST

A DST offers many benefits to an investor that are not found in other types of real estate investments in shared ownership. However, DSTs do not carry certain risks, like any other investment.

One of the main risks to consider is the use of a program sponsor to manage the investment. Unlike a common leasing system (TIC) in which individual investors have their say, investors in a DST surrender the day-to-day decision-making power to the program sponsor. This means that if the program sponsor made reckless decisions or became insolvent, the DST could fail without any significant contribution from individual investors.

In addition, as with any investment, the use of a DST for exchange 1031 carries tax risks. Although DSTs are often ideal for this purpose, there is no guarantee regarding the IRS. It is still possible that the IRS does not approve the DST structure or a particular 1031 exchange.

Although the benefits of a DST tend to outweigh the risks, it is prudent to fully understand both when deciding whether or not to participate in a DST.

How a charitable remainder trust avoids capital gains

Charitable residual trusts can increase your income, avoid capital gains taxes, reduce or eliminate inheritance taxes, provide another type of pension plan, serve humanity and put your heart in your heart. Here&39;s an example that applies to anyone considering selling a highly valued asset.

On the path of progress

Clarence and Mildred owned a family-owned farm since 1930. They raised corn and had a few cattle. However, the farm has been inactive since Clarence&39;s death 10 years ago.

The farm was once in the country. Over the years, the neighboring town has expanded to the point that its boundaries have almost reached the farm.

A real estate development company with an offer she has a hard time believing recently contacted Mildred. They want to build a giant mall on his property. In addition, they are willing to pay $ 14 million for its 80 acres.

Although Mildred is tied to her 40-year-old home and lifestyle, the decision is easy. The farm was originally homesteaded and has no base. How can it minimize the capital gains tax?

The procedure would require him to donate the farm to a charitable remainder trust. The trust would then sell the property to the real estate developer. She should use a estate planning lawyer to ensure that the gift to the trust and the subsequent sale to the real estate developer are not interpreted as a predefined series of transactions.

The use of a residual charitable trust gives Mildred the following benefits:

1. It does more than minimize the capital gains tax; she avoids it altogether. If the capital gains rate is 15%, it saves $ 2,100,000 in capital gains tax. Mary is frugal. She backed up all the buttons of a shirt, blouse or shirt. She is also suspicious. She thinks she can use $ 2,100,000 better than the people of Washington DC

2. A residual charitable trust requires an annual payment of at least 5%. It&39;s $ 700,000 a year. She is ready for life and can take every grandchild to Disneyland every year.

3. She will get a huge tax deduction based on her charitable contribution to the trust. It will be so big that the IRS will allow it to defer the unused portion for six years. It&39;s a good bet that it will not pay any income tax for the next six years.

4. She can name any number of charities to receive the $ 14 million from the trust upon her death. In the end, she could have a new church, a hospital wing or scholarships named in her honor and Clarence for his generosity. The number of people who could benefit in the future is too important to be taken into account.

5. If she wishes to disinherit her heirs, she may use part of her income to take out a life insurance policy and name her beneficiary children and grandchildren. She could also donate up to $ 12,000 (currently) per year to as many people as she wished, with no impact on gift taxes.

6. No inheritance tax will be payable on his death.

7. The $ 14 million will be professionally managed in the trust, the rest of the charitable. She has no investment concerns and can build trust to have a guaranteed income. Economic downturns, weather disasters or global events will have no effect on its revenues.

It&39;s true that Mildred could just sell the farm and pay the capital gains tax. In addition to the capital gains tax, the entry into this large sum could create more problems.

She should invest it while rejecting the suggestions of well-intentioned parents. She would have estate planning to do to prevent half of her estate being charged to the government in taxes upon her death.

When you put the trust of other charities on the table as an option, most of these problems disappear and many additional benefits appear.

Successful Strategies for Realtors

Sometimes a real estate agent can fall on success for a short time, but it&39;s unrealistic to do it all the time. What agents need to understand is that success requires strategy and planning.

Real estate is not a job, it is a business. When you have a job, you receive instructions and tasks from your manager or business owner, but in real estate, you are the boss; it is your responsibility to plan accordingly.

When agents are new to the business, they are like sponges that absorb as much knowledge as possible. The only problem for them is to do what they have learned. It&39;s not that they do not want to; they simply do not do it for a number of reasons. The main offenses are the lack of personal motivation, the inability to follow a plan, time management, listening to negative people, the lack of presentation and the loss of means. Believe it or not, this applies to new and old agents.

So, what do we do to avoid failure? Going back to basics, whether new or old, would be a good start. It is also extremely important to use a business plan to stay on track.

One of the best ways to do this is to have open houses. If you do not have any of your own lists, ask one of your associates if you can arrange an open house on one of their lists. If you can not find a buyer for this house, try to find a buyer willing to work with you to see others. You can do this by working on scripts to turn an observer into a buyer. It&39;s up to you to make your day open as productive as possible.

Attend as many training seminars as possible. Even if you have been in the business for quite some time, you can always find out about the seminars. Take as many notes as you can and write clearly so that you can understand what you have written in a hurry. If your broker offers training, take full advantage of it.

Stay away from negative people. Their influence on you will have a negative effect on your production and you certainly will not do it as well. Only take advice from HIV-positive people who are doing well. That&39;s what they do that you should imitate.

Set a schedule for your work hours as if you had a job. It is very easy to fall into the trap of not "showing up" because "you do not have to do it".

A good business plan can help you.

The importance of including a charity in planning your estate

Testamentary and estate planning:

Estate planning is one of the wisest things you can do with your property. Forbes cites the concrete consequences of the absence of an estate plan. Planning your estate and making sure all your wishes are clear and organized through the creation of a will are things to do early in life. This is when your mental faculties are in perfect condition. This ensures that the time and effort you put into creating and keeping your life and loved ones safe and untouched long after you leave.

In making a will, it is important to include charity in your appointed legacies. This gives you an advantage, as well as your estate and beneficiaries.

Longer life and better health

The Journal of Economic Psychology has published a 2015 study on charitable giving. It indicates that charitable giving enhances the physical and emotional well-being of the donor. When you include charity in your will, you benefit personally. You live longer and you do better. You are pleased to know that your efforts are helping to improve the lives of not only your loved ones and yourself, but also so many others. It validates all the hard work that you have put. With more positive perspectives, it&39;s hard to think of what else can beat the immediate benefit of improving health and life expectancy.

Tax credits

Tax credits for donations to different charities depending on where you live. Donors automatically benefit from tax breaks for charitable bequests extended to charities. For example, testamentary bequests to registered Canadian charities can grant tax credits of up to 100% of the donor&39;s income. The credit can apply not only to the year of his death, but also to the previous year. CTF publishes a report from the Standing Committee on Finance Canada (and others) to learn more.

A savvy investor benefits from provisions like this one. Investing part of your estate in a charity can reduce death duties at a significant rate. Taxable amounts on the estate exclude any value set aside for charitable donations. This immediately reduces the property taxes due. In addition, charitable donations entitle you to tax credits. This will further reduce the amount of tax payable on the estate. With reduced taxes, you keep more of your estate. Develop strategies to achieve the best tax rate per donation amount. To do this, the best is to consult a real estate planner.

The need for precision

Avoid legal problems by ensuring that your charitable bequests are named accurately. Identify with the help of business features that remain the same throughout their existence. You can use company identification numbers and business identification numbers for better identification. Let the details stay current. Updated name changes may invalidate your donation.

Remember to name a charity in your estate planning. This will not only benefit the charity and build a stronger community, but you will benefit as well.

How to conclude the best deal in Spokane Washinton

Spokane Washinton is a very good place for real estate investing! This region is the administrative center of the county of the same name and has become in recent years a prosperous and lucrative region. Spokane is the commercial center of Washington and can offer many benefits to investors. This territory is rich in natural resources and is considered the ideal place to start a business from scratch. Judging by the fact that branches such as the mining industry, agriculture and horticulture have grown considerably in recent times, investors have a multitude of different types of industries. options to choose a new direction for their activities.

In addition, Spokane Washinton is a very good place for real estate investing because the area is in continuous expansion and development. Despite the fact that, in the past, investors ignored this region, ignoring all its potential, today, real estate investors are struggling constantly to conclude the best transaction in Spokane. Whether you own a home or a property in Spokane and want to sell it, or want to grow your business in this area and therefore want to buy, it is very important to be properly informed!

If you own a property in Spokane, why would you rush to accept the first offer you receive? Take your time and carefully examine the real estate market before closing the deal. On the other hand, if you are a real estate investor and you are interested in buying a house or property in Spokane, how can you get the most out of your transaction? Only strong investment strategies, the latest information, good trading techniques and perfect timing can help you get ahead of the competition in making the best real estate deal. The trick in real estate investing is to offer the best deal at the right time!

Say you want to grow your business and want to buy a property in Spokane Washinton. What would you do? Finding the best deal takes a long time and it is very difficult to know exactly where, when and how much to invest! Is not it if you use the internet? There are thousands of real estate investment websites that offer business owners the opportunity to make the most of their transactions. Good, reliable real estate websites are powered by professionals who provide subscribers with tips, strategies, up-to-date information and quick feedback. These websites can save you a lot of time, money and effort by frequently providing you with a solid valuation of the real estate market!

If you are a real estate investor and want to close the best deal in Spokane Washinton, but you simply do not have the time to conduct a local real estate market appraisal, look for a professional website at your disposal. listening. for you! Choose the real estate investment website that suits you best and you will not be disappointed!

Limited Liability Companies (LLC) in Asset Protection Planning

Limited liability companies are exceptional asset protection vehicles. As a business entity, the owners of the company & 39; personal property is safe from the responsibility of the company. The assets of the company are also protected from the liability of its owners. If the company is the subject of a lawsuit, the LLC defends the owners of the responsibility related to commercial transactions. In addition, when the owners are personally sued, the law contains provisions that protect the assets inside an LLC from seizure to enforce a judgment. Limited liability companies are remarkably useful when they are used to preserve real estate.

A limited liability company ("LLC") is an unincorporated business. Depending on its structure, all owners can benefit from limited liability protection, and all can contribute to management and control. In the United States, an LLC provides its owners with several tax options. Only one LLC member is considered a sole proprietorship (ignored entity) for tax purposes. With two or more owners, an LLC is taxed as a partnership rather than as a corporation for federal income tax purposes. Limited liability companies may be taxed as a corporation or even as a corporation S. By amalgamating the limited personal liability and tax classification of partnerships, the LLC may offer benefits that are not available to corporations, partnerships or limited partnerships.

LLC Real Estate Protection
The LLC offers asset protection that makes it a favorite for real estate investments. The LLC combines liability protection and positive tax treatment of partnerships. As a general rule, real property creates a liability risk for tenants and customers, leases, contracts, environmental laws, mortgages and other laws. Nevertheless, limited liability companies are advantageous when they are used to own assets generating passive income.

Taxes and LLC
When an LLC is properly structured, it can be classified as a partnership for federal income tax purposes. It may attribute to its owners tax elements, including income, gains, losses, deductions and credits, in accordance with its operating agreement.

Social responsibility companies taxed as partnerships or limited partnerships do not benefit from any tax benefits. The primary benefit of the LLC over a limited partnership is the limited liability protection available to all owners and managers of the LLC. Limited partnerships are mandated to have one or more general partners, who are personally liable for the debts and obligations of the company. However, as described below under Family Limited Partnerships, the General Partners may be a corporation, LLC, trust or other business entity that protects the principal owners of the family by avoiding becoming a general partner. The LLC provides protection for its assets to its owners, regardless of their involvement in the management and control of the affairs of the corporation.

Limited liability companies are extremely flexible and can be used in estate planning. The majority of an LLC may belong to non-home children, while parents run the business. In the operating agreement, non-manager owners become managers in the event of incapacity or death of parents. Without asset transfer, inheritance tax is eliminated and the life of the LLC can be perpetual.

5 secrets to be a successful real estate agent

Many real estate agents rarely manage to cross their first 2-3 years. Reason being, they underestimate or overestimate the costs of their services. In addition, the mere fact that a person has decided to become a real estate agent does not mean that it will take its first steps and earn commissions immediately.

If you want to consider real estate as a career, the following tips can ensure you survive the first three torrential years.

1. Develop a budget and follow it

You must file your living expenses one by one and avoid omitting anything, including a withdrawal for refreshments or transportation costs. Make sure you plan to cover your real estate expenses too. Cover all your costs as possible, add a little bit and do some planning for a business.

2. Develop a plan and stick to it

Long-term success depends on many things, but a good business plan for the suburbs is one of the most important things to consider. The beginnings of a new real estate career are exciting, but do not let your enthusiasm for having a client immediately to keep you safe from the essential tasks of business budgeting. Avoid wasting a lot of money and focus on the core business practices and start building your point of view.

3. Think small for a good success agent

Thinking small, that is understanding your status and setting up your business practices and your marketing. As an independent contractor, this growth and success planning allows you to keep your business like yours and to be mobile.

4. Must not be listed at the last

A new agent, you must register your properties to survive in a real estate. By listing your properties, you&39;ll know how the market and business have changed and how you can succeed in your career. You may be able to work freely with buyers, which gives them more respect and a better balance for your business.

5. You do not have to be the best of sales

If you are the best it is nice but it is not necessary for you to succeed to be a real estate agent. You have to manage your business in a unique way, which will separate you from the insistent home reseller impression. Consider being a consultant and try to postpone the idea of ​​selling even if you have a lot of business at your disposal.

Starting shot!

Most people who fail in real estate do not plan or budget for their success. So, if you pass the exams, get the license and get to work.

Estate planning is particularly important in times of economic difficulty

In the face of a tighter budget or an uncertain economic future, many people instinctively reduce everything in their power to make up for any losses. This is not a bad thing, as excessive debt and lack of planning both contribute to the financial hardship. But redoing a budget to offset changing economic conditions requires improved planning, not a deferred planning.

Estate planning is often thought of in terms of number, ownership, assets and finances. While estate planning encompasses all of these things, a good estate plan is all about people who will benefit from your efforts and your legacy. Estate planning is about maximizing the benefits of your work while you&39;re alive and providing for your family and loved ones after you die.

Keeping in mind the true importance of estate planning will help people stick to their plans or encourage them to embark on planning even in times of economic crisis. Estate planning is easier than most people think and will create a peace of mind that is worth it.

In addition to helping you organize your finances and assets in the short term, estate planning during times of economic crisis also has obvious long-term benefits. Continuing to plan and pay contributions to trusts, life insurance policies, retirement accounts and other accounts will minimize the damage that could be done to your estate in the long run. Not planning in times of economic downturn can in fact unnecessarily increase the effect of financial hardship.

Estate planning is important for individuals and their families, and even more so in a failed economy. Consulting a lawyer and sticking to an estate plan will give you peace of mind in the present and maximize the benefits in the future.

Important things to know in real estate law

Real estate is everything related to the construction and development of land and commercial or residential buildings. This seems like a very simple concept, but many legal disciplines are included. Real estate law governs who can use the owner of the land or buildings.

Some terms to note in real estate law:

• The title is the official legal term that describes the owner of the property

• Mortgage lends money with interest in exchange for title to the debtor&39;s property. Once the payment of the debt has been successfully completed, the transfer of the title becomes void.

• Foreclosure is the term used if the lender takes control of the house or any property used as a mortgage if the debtor does not repay the amount.

• The official meeting for the transfer of ownership of the land or property is called fence

• Escrow is the term used to refer to money or property held by the third party for conservation purposes

• The real estate agent is the person authorized to negotiate and carry out real estate transactions.

The long-awaited regulation in the real estate sector was announced by the Indian government last year, namely the introduction of the RERA (Real Estate Regulatory Act). Under the law, home builders must deposit approximately 70% of the amount on the escrow account. This will ensure buyers that the amount will not be diverted to other projects.

Advantages of the RERA law:

• As previously mentioned, the builder will transfer 70% of the amount withdrawn from buyers to an escrow account, which will assure buyers that their amount is only used for this project and is also secure without being transferred to other projects.

• With the introduction of this new law, buyers do not have to pay for the carpet-covered surface. This is one of the important things to remember.

• All releases from the buyer and builder must be made prior to sale. The builder must disclose the information regarding the apartment.

Builders are only allowed to sell the property after obtaining the necessary permits.

RERA, is the central law, but as real estate is subject to the state, state governments have a major role to play in the implementation of this act. However, other areas of practice related to real estate law include tax law, tenants&39; rights, accidents and injuries, estate planning, insurance law.

Real Estate Brokerage: A Guide to Success, by Dan Hamilton

The American dream is to own a business of your own. Real estate agents or those who are planning to open their own residential real estate brokerage should read Dan Hamilton&39;s new book on creating a successful brokerage.

Real Estate Brokerage: A Success Guide by Dan Hamilton, Thomson / South-Western, 2006, ISBN 0324379463, paperback, 380 pages, $ 46.95 is written by an experienced real estate broker and an instructor. Hamilton readily admits that the brokerage industry is undergoing a dramatic change in how it will continue to be financially successful and will remain the first point of contact for residential property consumers. Admission is one thing, but the author provides clear and profound ways to reorient your broker from agent compensation, agent recruitment and retention, business planning and development to marketing innovative brokerage. All ideas are explained in great detail, with the added benefit of bold headings and points for those who want an easy-to-use desktop reference.

The chapter titles include: real estate, real estate broker and owner, real estate brokerage, real estate brokerage, real estate marketing, additional marketing ideas in real estate, real estate brokerage compensation structures, Real Estate Brokerage Staff Relationships, Real Estate Salespeople Recruitment, Recruitment Interview, Retention of Real Estate Salespeople, Business Development in Real Estate, Real Estate Business Planning, Financing a Real Estate Business and Real Estate starting a real estate business.

In addition to the chapters, there is an appendix and an introduction. The chapters are presented in an easy-to-understand format with revision questions to help the reader assimilate chapter information and relevance. The boxes highlight definitions or important statements. One benefit that I particularly liked is the use of relevant definitions contiguous to the text in place of the usual glossary at the end of the book.

This book is recommended for current dealer managers, real estate franchise executives, broker educators and trainers, and those considering creating their own brokerage.