Priority Services Group

RSS Feed Homepage

Capital Gains Rates Revisited
2007-11-28 04:52:00
SOME VERY USEFUL INFORMATIONIn this edition of the Real Estate Revolution, we will share some useful information that is to short to warrant a single newsletter.CAPITAL GAINS RATES REVISITEDExactly what Capital Gains rate applies to the sale of your property depends on several things, including when you bought the property, when you sold it, your overall income level and sometimes what tax-code changes are made in the meantime.Currently, capital gains may be taxed at 5 percent, 15 percent and 25 percent or a combination of rates (These lower rates are scheduled to end on Dec. 31, 2010). These tax levels are known as long-term capital gains and apply to property that you hold for not less than 366 days (more than one year). The long-term capital gain tax is, generally, much lower than what you pay on your regular income.In fact, it is a taxpayer's income level that generally determines which capital gains rate is owed. If your profit pushes you into a higher bracket, you could possi...
More About: Rates , Capital Gains

The Depreciation Recapture Tax Trap Part 2
2007-10-19 20:46:00
In this edition of the Real Estate Revolution, we will provide our readers with an understanding of depreciation. Wow! The recently passed tax law just lowered the capital gain tax rate to 15%... great, uh? Well yes, but not so fast! We all know how important it is to understand how the tax law affects our real estate investments. Understanding and forecasting the tax ramifications of rental property ownership is a critical step in the screening and decision making process. Misunderstanding and misapplying the tax law during your analysis can result in ghastly surprises. As a real estate investor, you can depreciate our rental property and enjoy the positive cash flow resulting from write-off of tax depreciation. Tax depreciation helps shelter rental income that is subject to "ordinary income" r...
More About: Part , Trap , Depreciation , Reci

Real Estate Investors Beware!
2007-09-12 21:50:00
The depreciation recapture tax trap part1In this edition, Priority Services Group will help our readers understand depreciation.You cannot exclude from taxation any gains, which are attributed to the depreciation you claimed after May 6, 1997. I'll explain what that means in a minute. You have owned the rental property for 11 years (which means you bought the property in 1995), and you rented out the property starting in 1997 (after living there for two years), it is likely that all or most of your depreciation will be recaptured. Here's what recapture means. It means you have to pay tax on the gains that are attributed to depreciation. And these gains are taxed at your ordinary income tax rates, not at the much lower long-term capital gains tax rates. This is explained in IRS Publication 523, Selling Your Home, in the section entitled Business Use or Rental of Home (link to IRS Web site). Let's provide an example with numbers to illustrate how depreciation recapture ...
More About: Estate , Real Estate , Real , Beware , Investors

A collapsing real estate market, how can you survive?
2007-08-27 19:34:00
The Escrow Recovery Program can help during a collapsing real estate marketIn today?s collapsing real estate market property sellers need all the help they can get in order to retain as much of their hard earned equity (profit) as they can. Unfortunately, this declining market is expected to worsen over the next 12 months while the market attempts to stabilize. However, it is interesting to note that real estate IS selling in almost every market, but those properties that are selling are those that are ?priced right? for the market they are in. In a ?down market? such as the one we are in, having your property priced to sell (priced right) will make the difference between selling and not selling. OK, now that we have stated the obvious, lets discuss what can be done to overcome these problems and effectuate a profitable sale. Some people have resorted to the use of what is called a 1031 exchange. This is a suitable alternative should you not need to receive any funds f...
More About: Estate , Real Estate , Real Estate Market , Market , Real

The Esentials of Corporate Estate Planning
2007-08-24 19:16:00
A CORPORATION NEVER DIES; IT JUST GETS A NEW PRESIDENTMoving your estate into your corporation is very advantageous with Nevada C-Corporations. We will take a look at how you pass your estate to your families without probate and attorney's costs through C-corporations. Many approaches to family estate planning are legitimate, and often effective ways of preserving family estates, but consider the rapidly changing tax and legal trends when looking to preserve a lifetime of hard-earned assets.Planning for the next generation is important. Currently the value of your estate that can be transferred to heirs tax-free is $2,000,000 and the exemption will gradually increase during the next couple of years to no taxes at all (in 2010). Keep in mind that at any time Congress can change this rule. If a Democratic administration takes place it has been said they would like to change this to as little as they can get away with. After this unified credit that we receive, the taxes on the r...
More About: Estate , Corporate , Rate

Capital Gains Tax reality, Personal VS. Corporation, can you afford not to
2007-08-10 23:50:00
HERE IS A LOOK AT THE TAXES YOU WOULD BE OBLIGED TO PAY IF YOU WERE SELLING PROPERTY IN YOUR PERSONAL NAMEBy selling real estate titled in your name or the name of a ?pass-through? entity (LLC or ?S?-Corp) you could pay as much as 60% of the income you receive from the sale in taxes. Those taxes include but are not limited to capital gains taxes, self-employment taxes, Alternative Minimum Tax as well as state and federal income taxes. Adding insult to injury, when you sell real estate titled in your own name or the name of a ?pass-through? entity, many of your ?real estate business expenses? will not be deductible when you file your 1040 tax return.INCOME TAXES REPORTED ON YOUR 1040 TAX FORMThe tax effect of selling property as an individual or the name of a ?pass-through? entity is that profits made from the sale of real estate are added to the income you report on your 1040 tax return. On the other hand, any losses from the operation of the property are deducted from your 1040 ...
More About: Personal , Reality , Corporation , Capital , Capital Gains

The 351 transfer, take control over capital gains
2007-08-06 23:21:00
In this edition we will provide our readers with a basic overview of the laws behind the little know 351 transfer.We continue to hear attorneys and CPAs as well as other allegedly knowledgeable professionals frivolously state that the Revolution can't do what it does. Interestingly, all this so-called expert advice is usually stated without the benefit of even having any understanding of how the process really works let alone how the Internal Revenue Code and court cases taken together do, in fact, provide the unquestionable basis for this unique program.The Escrow Program is a patent pending proprietary process. We will not delve into every aspect the Priorit Service Group employs in undertaking its program. However, in an effort to aid those interested individuals in understanding the legal, tax and technical aspects of the process, we will provide some of the "authority" for our program. That authority finds its basis in the little known Internal Revenue Code Section 351-transfe...
More About: Transfer , Control , Capital , Capital Gains , Capital Gain

The Taxes most Real Estate Investors don't apply to them
2007-07-30 18:36:00
THE TAXES THAT MOST REAL ESTATE INVESTORS THINK DON'T APPLY TO THEMIn this edition of Priority Services Group Real Estate Revolution, we will discuss Self-Employment and Alternative Minimum Taxes .Sadly, we live in a whole new world of taxes and restriction. In 2005, I attended a conference for CPAs and other tax professionals that was hosted by the IRS. At that conference, the IRS official conducting the meeting was asked specifically about self-employment taxes as it applies to real estate investing. The official was noticeable amused when he said that self-employment taxes have been in the code forever but up to 2005 the IRS didn't actively enforce the tax. Then he went on to say that starting in 2005-2006, the IRS would start actively enforcing the taxability of this tax. He said that the IRS tracks all real estate transactions and that in a year or two they would be auditing and penalizing those investors who failed to file and pay the tax in the year it was due. (OUCH!)WHAT A...
More About: Real Estate , Investors

Defer capital gains? We'll Show you how!
2007-07-26 01:03:00
HOW THE ESCROW PROGRAM WORKS In this edition of the Real Estate Revolution, we will discuss How the Escrow Program works. The Escrow Program is unique in that it provides each program participant with a FREE Nevada corporation (valued at over $3,000.00) and transfers the participant's property into the name of that corporation. Then when the property is sold, the corporation sells it not the program participant. THE CORPORATION INCLUDES: * NV Secretary of State articles of incorporation * NV Secretary of State initial list of officers * NV Secretary of State incorporation expedite service (if needed) * Corporation records book * Corporation IRS EIN number * Corporate compliance CD (includes manuals, minutes & contracts) * Corporation address in Nevada for first year * Bank introduction to Wells Fargo Bank in Nevada for the required corporate bank account By selling a property titled in the name of this corporation, the program participants elimin...
More About: Show , Capital , Capital Gains , Capital Gain

Real Estate Dealer Status
2007-07-24 21:52:00
THE IRS REAL ESTATE DEALER STATUS ISSUEIn this edition of the Real Estate Revolution, we will discuss the IRS Real Estate Dealer Status Issue.Real Estate Dealer Status: The Internal Revenue Code defines a real estate dealer as: "An individual who is engaged in the business of selling real estate with a view to the gains and profits that may be derived from such sales. On the other hand, an individual who merely holds real estate for investment or speculation and receives rentals therefrom is not considered a real estate dealer."Generally, a person is considered a real estate dealer if he/she has the intent of reselling rather than investment or more specifically if (1) the property is held primarily for sale; (2) the property is held for sale to customers; and (3) the property is for sale in the ordinary course of the taxpayer's trade or business (See, e.g., Winthrop, Ada Belle v. Tomlinson, 417 F.2d 905).The determination whether your real estate activities rise to the level of a ...

1031 Obsolete?!
2007-07-23 20:54:00
THE ESCROW PROGRAM IS A SUPERIOR VEHICLE FOR REAL ESTATE INVESTING WHEN COMPARED TO THE OUT DATED 1031 EXCHANGE In this edition of the Real Estate Revolution, we will discuss why the Escrow Program has rendered real estate 1031 exchanges obsolete. 1031 Exchange History: In the summer of 1990, the I.R.S. laid out in detail the procedure for turning a sale and purchase type transaction into an exchange that came to be know as a 1031 Exchange. These new rules allowed owners of certain types of like kind Real and Personal property to sell their property and buy other like kind property without immediately paying the Capital Gains Tax. The IRS Classification Of Real Estate For 1031 Exchanges: The classification of properties to be exchanged determines if the property qualifies for Section 1031 treatment. The last two types of property shown below qualify for Section 1031-tax deferral, but the first one doesn't. ? ? Property held primarily for sale. ("Flipping" Property)? ? Property held...
More About: Obsolete , Sole

Why is everyone recommending a corporation for Real Estate investing?
2007-07-20 20:41:00
In this edition of the Real Estate Revolution, we will discuss the basic differences between a "C"-Corp, an LLC and the "S" Corp. We continue to hear attorneys and CPAs as well as other allegedly "knowledgeable authorities" frivolously recommend the use of an LLC or Subchapter S corporations for real estate investing, when in many cases, that ends up costing their naive clients a lot more in tax dollars. For that reason, it's time for another refresher on some of the big differences between C corporations and S corporations as well as LLCs. Here are some of the more important considerations you should ponder when evaluating which entity will suit your individual situation best. * Tax Brackets: With our country's "progressive" tax rate structure, it is very expensive to have too much income on your personal tax return. For individuals, the nominal rates go from 10% to 38.6% with actual effective rates much higher due to the phasing out of so many tax breaks as income increase...
More About: Real Estate , Real Estate Investing , Corporation , Investing

Welcome to Priority Services Group, LLC
2007-07-20 20:38:00
For over 27 years Priority Services Group , LLC has been helping people and businesses legally increase their profitability, maximize their asset protection, limit their personal liability and successfully reduce their state and federal taxes. Inside this blog you will find a wealth of information on how Corporations, LLC's, Trusts, and Estate Plans can help you on your way to achieving financial freedom by reducing liability, maximizing asset protection, and preserving your privacy!