PropertyÂ Type: Land
City: Oak Bluffs
Description: Oak Bluffs, MA-Land-wooded 0.73 corner lot abuts conservation land with protective covenants in the private setting of Vineyard Hills. Town center, bike paths, beaches, Sailing Camp Park and Lagoon Pond are all just minutes away.
Contact: (860) 623-6581
In light of our recent partnership, the All States 1031 blog has merged with the Strategic Property Exchanges blog.
PropertyÂ Type: Land
The lame-duck Congress departed for its Thanksgiving recess with no clear path in sight for dealing with pressing tax issues: extension of the Bush tax cuts; resolving the estate tax problem; patching the alternative minimum tax (AMT); and dealing with extenders, i.e., deciding whether to retroactively extend some or all of the tax provisions that expired at the end of 2009 (including the research credit). What’s more, it looks as if the lame-duck Congress may not resolve these issues until the very last minute, i.e., right before Christmas. On November 18, Senate Finance Chair Max Baucus (D-MT) told members of the press to “get your snow boots on.”
The thorniest issue is the expiring Bush-era tax cuts. The Democrats (and the Administration) want to extend the tax cuts for “non-high-income” taxpayers only. The Republicans want to extend the tax cuts for everyone. The problem is that neither party has the votes to prevail. That inevitably will lead to a compromise of some sort. One possibility is an across-the-board, but temporary, extension of the Bush-era tax cuts for individuals.
Stay tuned to our blog and e-mail alerts for any late-breaking news.
Especially on Veterans day, we remember and thank all those brave men and women who have served this wonderful country. We are grateful for their selfless bravery and the sacrifices those service members and their families have made to afford us the freedom we enjoy everyday. Thank you Veterans!
All persons engaged in a trade or business who make certain payments (including rent) in the course of that trade or business of $600 or more in any tax year to another person must report that information to IRS. For payments made after December 31, 2011, payments subject to information reporting will also include amounts in consideration for property and gross proceeds. A taxpayer whose rental activity is a trade or business is subject to this reporting requirement, but, under pre-Act law, a taxpayer whose rental real estate activity was not considered a trade or business was not subject to this reporting requirement.
New law. For payments made after December 31, 2010, the Act provides that, except as provided below, solely for information reporting purposes, a person receiving rental income from real estate will be considered to be engaged in a trade or business of renting property. Thus, recipients of rental income from real estate generally are subject to the same information reporting requirements as taxpayers engaged in a trade or business. In particular, rental income recipients making payments of $600 or more during the tax year to a service provider (such as a plumber, painter, or accountant) in the course of earning rental income are required to provide an information return (typically Form 1099-MISC) to IRS and to the service provider.
The rental property expense payment reporting does not apply to:
… any individual who receives rental income of not more than a minimal amount, as determined under IRS regulations to be issued at some future time;
… any individual (including one who is an active member of the uniformed services or an employee of the intelligence community) if substantially all rental income is derived from renting the individual’s principal residence on a temporary basis;
… any other individual for whom these requirements would cause hardship, as determined under IRS regulations to be issued at some future time.
Neither the term “substantially all” rental income nor “temporary basis” is defined for purposes of this rule. It is unclear whether the taxpayer’s intent will control for purposes of the “temporary basis” test, or whether IRS will set a length of time under regulations or other guidance.
For more information on this new reporting requirement, contact Attorney Moore McLaughlin, owner of All States 1031 Exchange Facilitator, LLC by e-mail at fmm@AllStates1031.com or toll-free at 877-395-1031.
President Obama Signs Financial Reform Bill: a Good Start Toward Federal Regulation of Exchange FacilitatorsJuly 21st, 2010 by Alexandra Hart
All States 1031 and the Federation of Exchange Accommodators (FEA), the nationwide §1031 Qualified Intermediary trade association, supports strong regulation of the QI industry.
The Federation of Exchange Accommodators (“FEA”) is pleased to announce that the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) was signed by President Obama today.
The Dodd-Frank Act authorizes the creation of a Bureau of Consumer Financial Protection to be housed within the Federal Reserve. The Bureau is charged with regulating consumer financial products and services. The new law requires the Director of the Bureau to conduct a study and propose legislation and/or regulations to protect consumers using exchange facilitators, also known as Qualified Intermediaries, who facilitate tax-deferred exchange transactions under Internal Revenue Code §1031. The study and recommendations must be completed with 1 year after the new law takes effect, and a program or proposed regulations must be implemented within 2 years after the Director’s report.
The FEA, the trade association representing the exchange facilitator industry, believes that this is an important first step toward assuring comprehensive protection for all consumers. “The FEA especially thanks House Financial Services Committee Chairman Barney Frank and Rep. Mike Michaud and for proposing this provision in the financial reform bill. We are enthusiastic about working with the Bureau of Consumer Financial Protection to develop regulations, especially with respect to the security of client funds held by exchange facilitators,” commented Suzanne Goldstein Baker, chairperson of the FEA’s Federal Legislative Committee.
FEA President David Gorenberg echoed this sentiment, “This is a great beginning. However, there is much work to be done to achieve our goal of comprehensive federal regulation that will cover all exchange clients and transactions.” During the legislative process, the FEA communicated to legislators its support for the bill, along with technical concerns that many transactions will not fit the definitional scope of the Consumer Financial Protection Act of 2010, incorporated within the Dodd-Frank Act, and the need for a broad solution. “We are looking forward to working with the Director and the legislative sponsors to identify and suggest regulations or legislation that will not be limited to transactions solely involving individuals engaged in exchanges for ‘personal, family or household use,’” stated Ms. Goldstein Baker. “The FEA will work to ensure that all taxpayers, regardless of whether they are individuals or business entities, benefit from the same mandatory safeguards that protect consumers,” added Mr. Gorenberg.
The FEA is a robust supporter of federal regulation of its industry to require prudent funds management standards and other protections for its clients. In 2007 the FEA petitioned the FTC for regulatory oversight and submitted to it a comprehensive draft regulation. The FTC denied the petition, opining that there was no evidence of pervasive fraud throughout the industry and thus, the burdens of regulation would outweigh the potential benefits. The FEA has since been actively involved in passing state legislation to regulate exchange facilitators. The FEA drafted a “model law” which the states of California, Colorado, Maine, Nevada, Oregon, Virginia and Washington have adopted with slight variations. The FEA has also submitted to the Secretary of the Treasury and the Internal Revenue Service a proposed amendment to Treasury Regulations which would impose reasonable, understandable standards of prudent funds management requiring that funds held by Qualified Intermediaries be invested in a manner that maintains liquidity and preserves principal.
Breaking news from the Federation of Exchange Accommodators (FEA):
SB 483 signed into law in New Hampshire!
The FEA has received confirmation that the New Hampshire Governor has signed SB 483 into law in that state. The new law amends prior law which would deprive taxpayers Section 1031 tax deferral on a state level if they purchased replacement property in the name of a new entity, notwithstanding that the acquiring entity was a disregarded entity. The typical situation would be that in which a taxpayer was required by a lender or TIC sponsor to acquire a replacement property in the name of a new single member LLC. The State of New Hampshire began disallowing exchange treatment on those transactions in 2008 and began to audit previously closed transactions as far back as 2004, without notice either to taxpayers or to the professionals in the industry. The new law makes it clear that exchange treatment will not be affected by taking title in the new entity as long as the entity is a single member LLC, revocable trust or other entity which is disregarded for federal income tax purposes. The amendment eliminates the “claw back” efforts to 2004. This ammendment is great news for New Hampshire residents or property owners who want to defer taxes with a 1031 exchange while protecting their assets in various pass through entities.
Thank you for helping to get the word out and boost our participation on the NAR Call for Action this week and the push for the extension of flood insurance and rural housing loans as well as the closing deadline of the homebuyer tax credit.
The good news is we boosted our Call for Action response numbers from 7 percent earlier in the week to 12 percent today. President Sears’ reminder emails to all m
embers who had yet to respond, and to all Brokers to urge their agents to respond, had a significant impact. This Call for Action is still live for members to respond to.
The bad news is the Senate has not voted on the bill. The latest update from NAR Government Affairs is copied below, along with an article explaining the impasse in the Senate.
FROM: NAR Government Affairs
NAR is working very closely with key Members of Congress and the Senate, and Senior Congressional Staff on two issues of critical importance to the membership: an extension of the June 30, 2010 deadline for closing contracts eligible for the Homeowner Tax Credit, and a reinstatement of the National Flood Insurance Program.
Here are the latest details on the Tax Credit Closing Deadline:
Our best advice to members with questions and concerns is to proceed as if the June 30, 2010 date is binding.
NAR is pursuing all possible options with senior congressional staff to determine what other legislation may be available for passing a June 30 extension. Each of the possible options face difficult obstacles, but NAR’s efforts to clear the way are on going.
The Senate will NOT have any votes today (Friday, June 25) this will push the Tax Credit Extension deadline to the week of June 28, 2010.
Should Congress extend the date, information will be posted on www.realtor.org/government_affairs as soon as it happens.
The final outcome will be posted on www.realtor.org/government_affairs on July 1, 2010.
Here are the latest details on the national Flood Insurance Program:
The Senate will NOT have any votes today (Friday, June 25) this will push the consideration of H.R. 5569 (National Flood Insurance Program Extension Act of 2010) to the week of June 28, 2010.
NAR is working with Senate leadership in both parties to urge the Senate act quickly to pass H.R. 5569.
Additional information is available at http://www.realtor.org/government_affairs/natural_disaster
Filibuster halts bill boosting jobless benefits, aid to states
By Lori Montgomery, Washington Post | June 25, 2010
WASHINGTON - Senate Democrats yesterday abandoned efforts to provide more assistance to state governments and extend emergency unemployment benefits for millions of jobless workers, leaving in limbo President Obama’s push for more spending to bolster the economy.
The decision came after the Senate failed again to muster 60 votes to advance a package of tax cuts and emergency economic provisions. Senator Ben Nelson, a Nebraska Democrat, joined a united Republican caucus in voting to block the measure, citing concern that even the latest slimmed-down version would expand bloated budget deficits. The package fell short, 57-41.
Senate majority leader Harry Reid, Democrat of Nevada, blamed Republican intransigence for killing the measure and dismissed talk of continuing negotiations, saying the only path forward would require Republican compromise.
“We’ve tried and tried. This is our eighth week on this legislation,” Reid said, urging reporters to direct questions about the measure’s fate to Senate minority leader Mitch McConnell, Republican of Kentucky. “We are here. We’re willing to work.”
McConnell, meanwhile, blamed Democrats for the impasse. “The principle they’re defending here is not some program,” he said. “The principle Democrats are defending is that they will not pass a bill unless it adds to the debt.”
For Massachusetts, the vote could have widespread consequences. Emergency jobless benefits, which provide up to 99 weeks of support, expired June 2. About 30,000 laid-off workers in Massachusetts have already lost benefits; up to 100,000 would eventually be affected.
The bill also would have supplied a $16 billion boost in Medicaid funding for states, which would mean about $500 million for Massachusetts, according to the Center on Budget and Policy Priorities. That figure is lower than an earlier proposal, which would have supplied a $24 billion boost, or $760 million for Massachusetts.
Governor Deval Patrick and state legislative leaders had expected that money in their budget projections. Without the federal help, the Massachusetts House and Senate passed a stripped-down budget last night that cuts aid to communities.
The US Senate version also had funds for summer jobs programs, a program championed by Senator John F. Kerry.
“This is one of the worst moments I’ve seen in 25 years in the United States Senate,” the Massachusetts Democrat said after the vote.
Other senior Democrats said they are likely to try again to attract GOP support for the measure, which Obama has called critical to propping up the nation’s still-fragile economic recovery. But after four months of talks, frustrated senior Democrats said they would probably delay further action.
“People are in the mood of letting the dust settle before finding the next step,” said Senate Budget Committee chairman Kent Conrad of North Dakota.
The legislation would have increased budget deficits by $33 billion over the next decade.
The US House did pass a bill yesterday that spares doctors a 21 percent cut in Medicare payments. The measure, already passed by the Senate, would delay cuts six months while lawmakers work on a permanent solution. The bill goes to Obama for his signature.
Matt Viser of the Globe staff contributed to this report.
Thanks again and have a wonderful weekend,
Local Government Affairs Coordinator
Direct Phone: (781) 839-5510
Direct Fax: (781) 839-5560