“Secrets of Lease Option Profits” by Jack Shea and Mark Warda has been published by Galt Press. The book features Virtual Option strategies, which are sometimes more or less than they appear. A complete system for purchasing with an option which could deliver ownership benefits, including depreciation is described. A procedure for a tenant lease/option is presented that does not deliver a property right, requiring foreclosure to remove a tenant. This product is available at www.jackshearealestate.com
Press Release: Jack Shea is a Certified Exchange Specialist as designated by the
Federation of Exchange Accommodators. This CES designation is awarded to those
members meeting the education, experience and examination requirements set
forth by the FEA and was issued Sept 30, 2004.
Press Release: Daniel Imbior was recently notified that he has been
designated as a Certified Exchange Specialist by the Federation of Exchange
Accommodators. This CES designation is awarded to those members meeting the
education, experience and examination requirements set forth by the FEA and
was issued October 12, 2006.
VACATION HOMES: DO THEY REALLY QUALIFY?
Can a Vacation Home be ‘Held for Investment’ – the Authorities?
Property will not be eligible for non-recognition treatment unless it is held
by the taxpayer for either productive use in a trade or business or for
investment. Trade or business includes rental property. A vacation home can
be rented part of the year, or held simply for personal use by the taxpayer,
but can it be ‘held for investment’ by the taxpayer within the meaning of IRC § 1031?
A. Regulations. Neither IRC § 1031 nor the Regulations define “held for
investment,” although the Regulations provide that unproductive real estate
held by a non-dealer for future use or future appreciation is held for
investment, Reg §1.1031(a)-1(b).
B. Ltr Rul 8103117: The “Maintenance Ruling’:
“This property was intermittently rented and used for [taxpayer’s] personal
benefit. During the past 6 or 7 years, the house has not been rented and
[taxpayer has] occupied it approximately 10 days per year for maintenance
“The stated purpose … was to provide for personal enjoyment of the community
and also to make a sound real estate investment in a growing community.
C. Dewey v. Comm’r. The Tax Court has held that a two-week timeshare
received by taxpayer as replacement property in an exchange was not used in a
trade or business or for investment purposes when used for vacation purposes
by the taxpayer and family. TC Memo 1993-645, 66 TCM 1899.
D. Other Authorities based on “Held for Investment’. Some taxpayers take the
position that the vacation home is held for investment and therefore is
eligible under IRC § 1031. Vacation homes may qualify as investment property
if personal use is minimal, or the home is also rented. A property is
apparently not “held for investment” within the meaning of IRC § 1031 if
losses from a sale or exchange of the property cannot be deducted.
CALIFORNIA QI LAW ENACTED INTO LAW
October 2, 2008
The Governor of California signed SB 1007 into law and a copy of the new law
is attached. We believe that this
represents a victory for the FEA and the QI industry. Many FEA members worked
hard to get the law into a form
that would accomplish the goal of providing consumer protection to exchangers
without unduly burdening the QI
The provisions of the new law will be effective for all exchanges after
January 1, 2009. Therefore, you should
review the requirements to be sure that your company is in compliance if you
do business in California.
What does the law provide? The California law does not provide for
registration or licensing, but does provide for
insurance and investment standards for exchange facilitators.
45 and 180 Day Extensions for California Counties
The IRS has issued an extension Notice for the following California counties
for the wildfires from November 13, 2008:
Los Angeles, Orange, Riverside and Santa Barbara [Note that the IRS may add
additional counties later as FEMA adds
counties. If you are near the affected area, you should check the disaster
announcement website for updates. The FEA
will not issue announcements if more counties are added.]
Both of the following criteria must be met to get the extension under Revenue
Procedure 2007-56, section 17:
(1) The taxpayer is located in one of these counties or is otherwise an
affected taxpayer as defined in the Notice, regardless of
where the relinquished property or replacement property is located, or
otherwise has difficulty meeting the exchange deadlines
under the conditions in Revenue Procedure 2007-56, section 17; AND
(2) The relinquished property was transferred (or the parked property was
acquired by the EAT in a reverse exchange under
Revenue Procedure 2000-37) on or before November 13, 2008.
IF the taxpayer meets these criteria, THEN any 45 day or 180 day deadline that
falls on or after the above date, is extended
to the later of February 11, 2009, or 120 days from such deadline.
Please see Revenue Procedure 2007-56, Section 17, and the notice below for