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Benefits of Tax Deferred Exchanges (IRC Section 1031)

February 15, 2021 by chorton Leave a Comment

Exchanging Real Property - IRC Section 1031

Building estates with PRETAX dollars.

There is talk in Washington, DC about eliminating the Internal Revenue Code Section that allows for “Tax Deferred Exchanges.”

“Don’t it always seem to go, that you don’t know what you’ve got til its gone…”

Benefits of Tax Deferred Exchanges (IRC Section 1031)

Why exchange real property?

To save taxes, yes, but said more succinctly, to build your estate with pre-tax dollars.

Using proper exchange techniques results effectively in interest free loans from the government. Other reasons to exchange include:

Increasing depreciable basis by acquiring property encumbered with a larger debt.

Acquiring sheltered income by exchanging for unimproved land for improved property.

Acquiring property without cash, when sales may be impossible.

Consolidating assets by exchanging many properties for one larger property.

Receiving nontaxable cash by exchanging and refinancing after and independent of the exchange.

Diversifying holdings without tax consequence.

Example of the Advantage of Building Equity with “PRETAX DOLLARS:”

Sale Price: $150,000

Adjusted Basis: $ 50,000

(Original Cost, plus Capital Improvements, minus Allowable Depreciation)

Recognized Gain: $100,000

Tax Bracket: 30% (for purpose of example)

Capital Gain Tax Paid to the IRS: $ 30,000

Balance to invest in next property: $70,000

Leveraged 4 to 1 results in a purchase of a $280,000 property

10% annual appreciation results in $28,000.

If you structured the sale in accordance with section 1031, and did not have to pay the taxes at that time (Deferred Taxes), you could invest the entire $100,000 leveraged 4 to 1 and purchase a $400,000 property.

At 10% appreciation, your increase in equity is $40,000. Multiply this $12,000 equity buildup over a 20 year investment horizon and the result is substantial.

Don’t let Congress take this tax benefit without saying anything…

“Don’t it always seem to go, that you don’t know what you’ve got til its gone…take Paradise, put up a parking lot???”

Looking for land to invest in Contact one of our Realtors at Preferred Properties of Texas

Search Texas Farm & Ranch Land for your next 1031 investment

Filed Under: Commercial Properties for Sale, Investing, Land for Sale Tagged With: investing, land for sale, land for sale in texas, Preferred Properties of Texas, stephenville tx, texas ranch land for sale

Mineral & Surface Rights On Your Land

January 17, 2021 by chorton Leave a Comment

There are two forms of rights which could be contained in property possession: surface rights and mineral rights. In the USA, landowners have both mineral and surface rights unless they opt to market the mineral rights to somebody else. After mineral rights are sold, the first owner keeps just the rights to the land surface, whereas the next party can exploit the underground assets in almost any way that they choose.

Mineral rights could be held in a variety of ways. As soon as the exact same owner retains both mineral and surface rights, it is referred to as a unified estate. When mineral and surface rights have been severed from one another, the distinct ownership is referred to as a property. A third solution is a property, where mineral rights are divided between many owners. This could occur, by way of instance, when a property owner divides rights one of many heirs or sells a few mineral rights but keeps others. A landowner can also opt to promote mineral rights to numerous buyers, each of whom subsequently possesses the rights to a specific bit of land.

What are surface rights?

Surface rights really are, as its name suggests the rights to the face area of a bit of property. Including any structures on the land, in addition to the rights to farm the property or exploit aboveground resources like trees, plants, or water based on local laws and ordinances. Ordinarily, you have the right to dig into a particular depth for functions like installing septic tanks. Should you have surface rights, then you’re permitted to sell or transfer title to the property, but you may not sell or rent your house into an oil, gas, or mining firm for mining or extraction.

What are mineral rights?

Mineral rights are the rights to subterranean sources such as petroleum, natural gas, silver, gold, iron, aluminum, coal, uranium, and other nutritional supplements. In the event that you or a former owner have sold the mineral rights to your house, it means that you have just what is above ground. If the mineral rights holder would like to extract funds, they don’t require your approval to do so. They can perform exploratory drilling along with other evaluations to ascertain whether or not to invest in additional advancement, and they’ll probably have to put in equipment and infrastructure such as pumps, wells, mine shafts, access roads, and electricity lines.

There might be a necessity for the mineral rights holder to offer damages for any surface damage, but essentially, they have the right to utilize as much of their surface as is reasonably required for mineral exploration and extraction, even without asking your consent. Each one these actions will impact the overall look of your property and your capability to utilize the surface in a sense you see fit.

Matters to consider when Purchasing property.
After mineral rights are severed from surface rights, they stay like that. If you’re thinking about purchasing land, be certain you research comprised rights thoroughly prior to making any buying decisions, to prevent any unpleasant surprises in the future. You might believe that you’re purchasing both mineral and surface rights, just to find that the former owner has offered mineral rights to another party. If you already have property and aren’t sure which rights you’ve got, assess your house deed or mortgage certificates.

Oftentimes, an oil, gas, or mining firm will attempt to work out a program which can minimize disturbance, but if you wish to retain total control over your property, it is always best to buy both mineral and surface rights. In the event you decide differently, be certain that you are fully advised of who retains the mineral rights and how this may influence your usage of the house.

Filed Under: Land for Sale, Ranches for Sale Tagged With: land for sale in texas, ranches for sale in texas, real estate tips, texas ranch land for sale

Fence Options For Your Land

January 16, 2021 by chorton Leave a Comment

You have found the ideal parcel of property, but the absence of a fencing means you might need to buy a fencing to suit your premises. Or maybe you’re trying to market some rural property, and are concerned that prospective buyers could be switched off from the lack of fence.

In any event, there are lots of choices for property fencing it’s possible to pick from. And, along with bringing potential buyers within an increasingly competitive property market, a lot of the next fencing choices may also help increase property value too. Think about the next land fencing alternatives and select one which best fits your requirements.

Corral panels are perfect if you’re only trying to place a few no-nonsense fencing around your property. The panels are easy to install and join, and frequently don’t even ask that you dig some postholes. Using corral panels to weapon a tiny area is more achievable in cost but not very functional for larger regions,

Flex railing is often chosen instead to strong plastic railings. They’re also fairly maintenance free and a few designs look like wood fencing.

Stock panels are easy, functional, and cheap alternative for those just trying to property fence without fretting about just how nice it seems.

Vinyl railing typically selected more for appearances, this really is a good alternative in the event that you would just like to create the fencing around your property appear fine, however they are not a sensible alternative for horse owners, because rails can easily be knocked out of place. Aside from that, they are simple to fit into articles, and do not require painting or staining.

Continuous steel railing a fantastic pick for placing land fencing around bigger areas, constant steel rail is attached to wooden poles, which makes a seamless fencing line.

Horse fence is obviously a fantastic selection for anyone who have horses in the house. It’s comprised of woven cable incorporated using a tight mesh. It empowers a horse to walk close to the weapon without the probability of this horse’s hooves becoming caught in conventional fencing or railings. It’s likewise affordable and may be connected to fence posts to enhance the sturdiness. As an additional bonus, this kind of fencing is able to appear appealing, raising land value. It’s best installed by an expert however, as it requires some skill and expertise to extend the woven wire fencing correctly from post to post.

Coated wire fencing is usually chosen as a substitute for cable fencing and can be assembled from electrical fence wire that’s been wrapped into a plastic coating. It is a fairly simple kind of fencing, excellent for people who only need some type of property fencing. It’s more powerful than a conventional wire fence along with the plastic coating provides more visibility too. Some forms of coated wire may also be deciphered.

Barbed wire is not quite appealing but certainly cheap, weatherproof wire fencing is acceptable for those who have possessions, but not always horses, since they are sometimes hurt by the fencing. Handling barbed wire fencing is clearly not without problem and necessitates careful patience and a great deal of gloves.

Electric fencing is simple to build around a large part of property and is comparatively cheap also. But a lot of individuals generally use electric fencing as a temporary remedy to other sorts of property fencing, unless there’s livestock on the property, in which case it’s more sensible. Otherwise, the fencing may frequently be quite brittle, and the minimal visibility makes it a problem for many. In general, it is a handy alternative for temporary fencing but requires continuous maintenance to guarantee the strands do not become loose and stay functional.

Natural fencing consistently looks quite appealing and there are definitely a broad assortment of styles to pick from. Any of them can help increase land value, but costs can vary based on height, style, and needless to say, just how much property is necessary. For large regions of property, natural timber fencing can be extremely costly depending on the style. Furthermore, natural fencing frequently requires postholes, in addition to routine treated or painting every so often. Massive amounts of pure fence can grow to be very labor-intensive, therefore many property owners shy away from this kind of fencing alternative based on that factor alone.

When contemplating your fencing options, it may be best to speak with a fencing specialist. He or she’ll take under account what your property is used for and just how big a parcel it is, and make the best recommendation based on your requirements and budget.

Filed Under: Home Improvements, Land for Sale, Ranches for Sale Tagged With: horse ranch, land for sale in texas, landwatch texas, texas ranch land for sale

Texas Ranch and Country Living

January 10, 2021 by chorton Leave a Comment

Looking for a place in the country but not far from town? Well, here it is! Gorgeous 49+ acre Ranchette. 4100 Sq. Ft custom built Austin Stone home with incredible views of the surrounding area! Great property for horses, goats, llamas or whatever you raise. Don’t wait and call today.

 

Filed Under: Homes for Sale, Ranches for Sale Tagged With: erath county, Homes for sale Stephenville TX, horse ranch, ranches for sale in texas, texas ranch land for sale

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