The IRS Tax Code And Real Estate Flashcards
The period of profitable use during which improvements contribute to value or are being depreciated is called the
Economic life
Additional capital or property included in a transaction to even out the exchange is called the
Boot
What is considered a single biggest incentive to investing in real estate?
The 1031
How long must a investor own a property before they can do a 1031?
One year
What happens to the taxes on capital gains at the time of a 1031?
They are deferred
What is the only thing taxed at the time of a 1031?
The boot
Under what circumstances can an individual have a tax free capital gain on the sale of real property up to $250,000 ($500,000 couple)?
If the property was the individuals principal residence for at least two of the last five years.
Under what situation or circumstance can the owner of a single-family home depreciate the property?
If it was used as a rental property
When a seller saves on capital gains tax by spreading the gain over a period of more than one year, this is called an
Installment sale
When does the installment sale title transfer to the buyer?
At closing
This is also called a contract for deed, where the seller is working with a buyer who does not typically qualify for traditional financing
Installment contract
When is it the title to an installment contract delivered?
When the final payment is made
