Fortitude's Insights

Attention Real Estate Attorneys, Certified Public Accountants, Investment Property Real Estate Brokers and Qualified Intermediaries!

Posted by Jeffrey Kiesnoski on Feb 17, 2017 4:25:42 PM

After speaking with real estate attorneys, CPAs, and investment property real estate brokers on a daily basis, we have come to realize that the majority of these professionals are unaware of the 1031 Exchange utilizing the Delaware Statutory Trust (DST) as a potential option for their accredited investor clientele who are in need of replacement properties.

There are many investment property real estate owners that have held onto properties for decades and have realized large capital appreciation on their property assets. Unfortunately, many of the investors are at a point in their lives where they would like to sell their properties but are hesitant to do so because of the large capital gains tax they could be facing. Many of these investors are tired of what we call the three ‘T’s—toilets, tenants and trash!

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Topics: 1031 Exchange

Why High Net Worth Real Estate Investors Are Choosing DST Investments for Their Real Estate Exchange

Posted by Daniel Raupp on Nov 7, 2016 4:36:00 PM

New York, NY, November 17, 2016 (Newswire.com) - Fortitude Investment Group, LLC. was founded by Daniel P Raupp, Jeffrey A. Kiesnoski and Jon Paul Cirelli.  Our firm is a fully independent alternative investment firm focused on educating our clientele in tax-advantaged and tax-efficient, asset-backed investment vehicles.

Our philosophy for accredited investors looking for 100% passive, institutional-quality replacement properties is based on preservation of capital and predictable tax-efficient income investment vehicles. 

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Topics: 1031 Exchange, Delaware Statutory Trust

What You Need to Know About 1031 Exchanges

Posted by Daniel Raupp on Nov 2, 2016 11:24:01 AM
While Section 1031 of the tax code is little known, it is starting to make its way into the lexicon of investors across the country.  Usually, they will say, "let’s 1031 that building." However, Section 1031 is not just for real estate – even though it is where it is most commonly used.  So, what is a 1031 and why do you need to know about 1031 exchanges?  This article will take a deeper look and try to give you some more insight on this fast-growing tax-free investment program.

In its simplest terms, a 1031 or a 1031 exchange is a swap of one asset for another. 

Unlike a sale, which is a swap for cash, a 1031 is a ‘"like-kind exchange" which is also known as a Starker. The beauty of these exchanges is that they limit the amount of tax due.  This means that under the eyes of the IRS, you will not recognize any capital gains from the transaction.  As you can see, this can be a powerful tool to defer taxes as you can roll the gains from one investment into another.  This can continue until you sell the final asset.

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Topics: 1031 Exchange, Depreciation Recapture, Delaware Statutory Trust

Extended Thoughts on the IRC 2704 Proposed Regulations

Posted by Jeffrey Kiesnoski on Aug 8, 2016 12:00:00 PM

This article was written by: Matthew E. Rappaport, Esq., LL.M, Tax Planning and Structuring Attorney

In the wake of the Internal Revenue Service releasing Proposed Regulations pertaining to IRC 2704 yesterday, I have received many questions and conducted many discussions about the Proposed Regulations' content and potential impact.  I posted a short status update about my preliminary thoughts yesterday and would like to expand on those thoughts with this article.

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Topics: IRC 2704, Property Regulations

Delaware Statutory Trust (DST) Versus Tenant-In-Common (TIC) Ownership

Posted by Jeffrey Kiesnoski on Aug 5, 2016 3:49:15 PM

Investors desiring the tax deferral benefits of 1031 exchanges coupled with the advantages of fractional ownership are increasingly seeking the popular alternatives of Tenant-In-Common (“TIC”) or Delaware Statutory Trust (“DST”) co-ownership. Recently, DSTs have been gaining in popularity for a number of reasons including the ability to secure financing more easily and attract more investors with lower minimum investment threshold amounts.

Let’s look at some of the attributes of DST fractional ownership and how DSTs differ from TIC ownership.

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Topics: Delaware Statutory Trust, Tenant-In-Common

Fortitude Investment Group LLC Announces the Launch of Their New 1031 DST Website

Posted by Jeffrey Kiesnoski on Jun 1, 2016 8:56:01 PM

PORT JEFFERSON, N.Y., June 1, 2016 /PRNewswire/ -- Fortitude Investment Group, LLC, is proud to announce the launch of their new website www.1031DST.com that is focused on educating and partnering with accredited real estate investors, qualified intermediaries, real estate attorneys, and CPAs. These partnerships will help facilitate 1031 exchange transactions utilizing a Delaware Statutory Trust (DST) to defer taxes on the sale of investment real estate while becoming a passive investor.

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Topics: Delaware Statutory Trust, 1031 Exchange

1031 Real Estate Exchanges Utilizing the Delaware Statutory Trust (DST)

Posted by Jeffrey Kiesnoski on May 4, 2016 12:29:00 PM

Many investment property real estate buyers and sellers, whether they are some of the most prominent real estate investors in the country right down to mom and pop who took a chance on buying a multi-family investment property in NYC years ago, may now be faced with a big challenge on what to do now that they are getting dream offers of a lifetime on their properties.

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Topics: Delaware Statutory Trust, 1031 Exchange

Cash Investments MORE – Multiple Owner Real Estate

Posted by Daniel Raupp on Feb 26, 2016 11:39:00 AM

High net worth, accredited investors looking for an investment alternative to traditional stocks, bonds, and mutual funds may want to consider investing in commercial real estate through a DST (Delaware Statutory Trust) or LLC with multiple investors.  The investments are known as MOREs – Multiple Owner Real Estate, and they are typically diversified portfolios of properties, such as retail, office and residential. They enable investors to select the private placement program that best suits their needs.

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Topics: Delaware Statutory Trust, Multiple Owner Real Estate

Seller-Financing Options For 1031 Exchanges

Posted by Daniel Raupp on Feb 26, 2016 11:06:45 AM

An Exchanger who elects to carry back a note on a relinquished property in a 1031 exchange has two basic options to treat the note:

1. DO NOT include the note in the exchange and pay any taxes that may be due

The Exchanger would receive the note as the Beneficiary at the closing and pay taxes on this portion of the capital gain under the Installment method (as specified in IRC §453). In this option, the note is made payable to the exchanger and is received by the exchanger at the closing of the relinquished property. The drawback is that capital gains taxes could become due in one lump sum if the note allows for prepayments or if a balloon payment is required.

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Topics: 1031 Exchange

DST 1031 properties are only available to accredited investors (generally described as having a net worth of over $1 million dollars exclusive of primary residence or $200,000 income individually/$300,000 jointly of the last three years) and accredited entities only. If you are unsure if you are an accredited investor and/or an accredited entity please verify with your CPA and Attorney. There are risks associated with investing in real estate and Delaware Statutory Trust (DST) properties including, but not limited to, loss of entire investment principal, declining market values, tenant vacancies and illiquidity. Diversification does not guarantee profits or guarantee protection against losses. Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated. The information herein has been prepared for educational purposes only and does not constitute an offer to purchase or sell securitized real estate investments. Because investors situations and objectives vary this information is not intended to indicate suitability for any particular investor. This material is not to be interpreted as tax or legal advice. Please speak with your own tax and legal advisors for advice/guidance regarding your particular situation. Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services offered through Concorde Asset Management, LLC (CAM), an SEC registered investment adviser. Insurance products offered through Concorde Insurance Agency, Inc. (CIA). Fortitude Investment Group is independent of CIS, CAM and CIA.

About This Blog

With over 100+ years of combined experience facilitating 1031 exchanges, including the largest 1031 exchange utilizing DST’s in our industry, we are your trusted partners in helping you achieve success.  We believe that education and service matter, and we are committed to providing our clients with the resources required to facilitate the entire exchange process.

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