1031 exchange artwork

1031 Exchange Artwork [Ultimate Guide]

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Have you heard of 1031 Exchange Artwork? Artwork and mineral rights do not have a lot in common. Whereas one hangs on a wall or appears in a gallery. The other is deep below the surface of the earth. Perhaps there is only one thing that artwork and mineral rights have in common. It is that both of these assets could be found in a well-balanced investment portfolio.

As energy becomes more important with each passing day, mineral rights continue to be one of the most valuable assets. Especially for American investors can hold. If the time has come to part ways with a piece of art, large sales can be maximized. This goes with a smart reinvestment.

In this article, we will break down the steps to take to 1031 exchange artwork. In doing so, we will showcase how like-kind properties such as mineral rights are the best way to maximize the sale of artwork.

How to Sell Your Artwork

Artwork has been one of the longest-standing types of assets throughout human history. Today, artists around the globe are selling their work in galleries, both online and in person. While there are a million different ways to network and sell pieces of your own artwork, this guide is intended to help investors who purchase and sell fine art for their homes, office space, and more.

You can 1031 exchange artwork only once the artwork is sold. If you are trying to sell a private collection of fine art, there are a few different methods you can choose from. Most commonly, investors choose to work with an art dealer. With mitigation and connections, a dealer may be able to accelerate the sale of your art at a similar or increased price for what you originally paid for it.

Determining the Value of Artwork

Artwork is tough to put a price on. In fact, it is safe to say that most people in the world have walked through a “fine art” gallery only to be left in shock to learn about the great expense of relatively simple-looking art pieces. With that being said, the fine art market continues to boom throughout the modern age and the price of a piece or portfolio is truly only equal to the price that someone is willing to pay for it.

Depending on the nature of the piece, any artwork is usually priced on:

  • The Size
  • The Materials
  • Framing vs. Unframing
  • Transportation Concerns
  • Artist Reputation
  • Quality
  • And more

Taxes Paid on the Selling Artwork

When selling artwork, the sky’s the limit. While starving artists may never get their reward, there are also many pieces around the world being exchanged for huge sums of money. While cash deals at artist’s markets may never see taxes being applied to the profits, there are considerable taxes paid on the sale of large private pieces and collections of art. Typically this includes:

  • Federal Income Taxes
  • Capital Gains Taxes
  • Sales Taxes
  • Local Taxes
  • And More

1031 Exchange Artwork

Depending on how long you held your artwork in your private gallery or collection, the sale may have short or long-term capital gains taxes applied. This could be anywhere from 0 to 20% of the piece’s final price, depending on how much the artwork is sold for.

With a 1031 exchange, artwork can be sold without having to pay any capital gains taxes. Here, the artwork must be “exchanged” for another asset within a fixed period of time. In doing so, reinvestments of funds qualify for complete or partial deferral of capital gains taxes.

Artwork Like-Kind Properties

The IRS qualifies pieces of fine art into the private property category. This means that artwork is no different than your house, your clothes, or your car and it can be bought and sold on the open market as a privately owned good.  In a 1031 exchange, artwork can be sold in exchange for:

  • Mineral Rights and Royalties
  • Homes and Apartments
  • Trailer Parks
  • Shopping Malls
  • And so much more.

1031 Artwork Exchange Timeline

With artwork sales, finding the right buyer is everything. Sometimes this is accomplished as soon as the piece premiers, whereas other times fine art can be held in a private gallery for many years before being purchased by an art collector. With this in mind, the clock begins ticking on 1031 artwork exchange eligibility as soon as a piece of artwork is sold.

Within 45 days of the sale of the artwork, one property must be identified for a like-kind 1031 exchange to be valid. Beyond this, taxpayers have exactly 180 days to purchase the new property for the elimination of capital gains taxes.

For additional requirements, please see our 1031 Exchange Rules and Requirements Page.

Using an Intermediary to 1031 Exchange Artwork

With the paperwork to file and deadlines to meet, we highly recommend working with a 1031 exchange intermediary when selling artwork and eliminating capital gains taxes. In doing so, taxpayers can focus more on their time identifying and evaluating potential assets.

What to 1031 Exchange Artwork For

More than anything, we strongly recommend that first-time sellers and experienced investors consider purchasing mineral rights in a 1031 artwork exchange. As the owner of a property’s subsurface, mineral rights holders can enter into mineral rights leases with oil and gas companies.

In doing so, a steady stream of mineral royalty payments can be earned as a fixed percentage on the monthly profits from natural resource sales. Mineral royalties are only available in a few countries throughout the world, with the United States being one of the few nations that allow the private ownership of mineral rights.

Conclusion

In conclusion, we hope that this article was helpful to people selling their artwork. We also how that you will utilize a 1031 exchange. When comparing new, like-kind properties, we strongly suggest considering mineral rights as a great part of any diverse investment portfolio.

If you have further inquiries on 1031 exchange artwork, feel free to reach out to us here.

1031 exchange rental property

1031 Exchange Rental Properties [Ultimate Guide]

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Do you know one of the most common ways to make your money work for you? Here in the United States, it is to invest in a rental property. Homeowners begin to realize fairly quickly this opportunity. They realized that purchasing a property and renting it to another is a great way to earn passive income. This is without having to perform that many day-to-day tasks. We will talk more about 1031 exchange rental properties in this article.

Of course, rental properties do not always pan out the way that some land and building owners had expected. Some properties may have trouble acquiring consistently paying tenants. Other assets may be better off sold for a tremendous amount of money.

With a large sale, comes large taxes. If you plan to sell your rental property, then it is important to be aware of the possibility of a 1031 exchange. This is one of the smart tools that many savvy investors are using. In this article, we will outline the steps necessary to 1031 exchange rental property and maximize the potential for reinvesting your funds.

How to Sell Your Rental Property

Of course, you can 1031 exchange rental property only once the property is sold. Rental properties are not by definition rental properties. Planning to sell your rental property to a new owner? Then they may live in the space part or full time without continuing the legacy of leasing out space.

With this in mind, coastal areas and vacation destinations are full of short-term rental properties. Whereas most American cities have long-term rental properties looking for monthly tenants. This can be in the residential, commercial, and industrial spaces.

With all of this in mind, there are essentially an unlimited amount of ways that you can go about selling your rental property. The secret is to find the right buyer and put the property in front of as many potential investors as possible. Today, this is most commonly useable by taking advantage of online retailers, specialty real estate agents, and property auctions

Determining the Value of a Rental Property

Depending on the type of property, a rental space can have a tremendous range of values. Rental properties are essentially a sum of their parts, but also have a lot of external factors to consider when putting a price tag on a personal asset.

In most instances, the value of a rental property is determinable by:

  • The size of the property
  • Number of buildings and building types
  • Property leasing history (short vs. long term)
  • Current physical condition
  • Market trends
  • And more

Of course, the true value of your rental property is only the amount that someone is willing to pay for it. Smart bargaining and demonstrated income potential will serve as allies when putting your rental property in the eyes of serious buyers.

In some cases, existing tenants may have an interest in purchasing the property that they are currently leasing. While this is saving them a ton of time and cost on moving, selling to existing renters is usually done so at a discountable rate if the relationship is strong thus far.

Taxes Paid on the Selling a Rental Property

Rental property sales are typically for a lot of money. Unfortunately, this means that rental property sales generally come with a large amount of taxes paid on the income generated from the financial exchanges. While landowners are no stranger to paying property taxes, most expenses applied to the sale of a rental property are one-time-only. These include:

  • Depreciation Recapture
  • Federal Income Taxes
  • Capital Gains Taxes
  • Sales Taxes
  • Local Taxes
  • And More

With governments taking their piece of the pie, it is not uncommon to pay as much as 40% in taxes on the sale of a large rental property. Some of this is avoidable, however, if taxpayers choose to utilize a 1031 rental property exchange.

1031 Exchange Rental Property

Rental properties are sellable using a 1031 exchange. This is an IRS procedure to eliminate the partial or total amount of capital gains taxes on the sale of private property. By trading up for another large investment, taxpayers’ capital gains taxes are deferrable if they are reinvesting the proceeds from a rental property sale into a new kind of asset.

As with most governmental dealings, 1031 rental property exchanges can be painstakingly detail-oriented with paperwork and deadlines to fill out and meet with precise requirements. Because of this, we strongly recommend that both new investors and experienced wealth managers use a 1031 exchange intermediary to make sure that everything is done correctly.

Rental Properties Like-Kind Properties

First, rental properties must go through the exchange for something that is “like-kind” for a valid 1031 exchange. Thankfully, the IRS views rental properties in the same what that they do most other private assets. For this reason, rental properties can be exchanged for

  • Commercial Buildings
  • Gas Stations
  • Shopping Malls
  • Apartments
  • Homes and Condos
  • Water and Ditch Rights
  • Mineral Rights and Royalties
  • And more

1031 Exchange Rental Property – Timeline

Once a rental property is finally sold, then taxpayers have 180 days to purchase a new asset to qualify for a 1031 exchange. Before this, at least one property must be identified (but not necessarily purchased) within 45 days of the sale.

For additional requirements, please see our 1031 Exchange Rules and Requirements Page.

What to 1031 Exchange Rental Properties For

At the end of the day, there are a lot of different ways that you can reinvest the funds from a rental property sale. However, the United States is one of the few countries that permits taxpayers to invest in might rights.

By purchasing mineral rights, you can become the owners of the subsurface of a property. With this, you can enter into an oil and gas lease, which allows energy companies to extract and sell resources from your property. In doing so, mineral rights are useable to establish another great passive income stream, from monthly mineral royalty payments.

1031 exchange hotels

1031 Exchange Hotels and Motels [Ultimate Guide]

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Owning a hotel or a motel is one of the most interesting property types in a portfolio. This is from a business standpoint. A highly profitable daily rate can lead to enormous cash flow. On the other hand, uncontrollable influences may lead to a hotel’s or motel’s ultimate demise.

Have you decided that your hotel has had its last facelift? Do you have an interest in selling your property to invest your money elsewhere? A 1031 exchange can be utilized to eliminate capital gains tax when reinvesting in a new property. This is for both hotel and motel sales.

Mineral rights and royalties rarely have as much upkeep or attention required to benefit from the investment. This is unlike hotels and motels, In this article, we will outline the steps necessary to 1031 exchange hotels and motels into mineral rights and royalties.

How to Sell a Hotel or Motel

Of course, in order to 1031 exchange hotels and motels, you must first obviously sell it. Selling a hotel or motel may actually be considerably harder to sell than you may have anticipated.  Hotels and motels commonly sit on the open market for months and even years on end. This is common in communities with dwindling populations or tourism,

Today, most hotels and motels are sellable with the help of a commercial real estate agent. In some cases, the hotel’s property you can find out for the desirable land it occupies. Whereas the majority of new owners will likely try to operate the businesses or repurpose the structure.

Determining the Value of Your Hotels and Motels

Are you using the help of a professional third party or not? It’s always a good idea to know the approximate value of your hotel. This is when trying to sell it in the open market. As most hotels are sellable as operational entities, there are a considerable amount of factors that go into determining the value of a hotel or motel.

Some of these include:

  • Property Size
  • Building Size and Condition
  • Current Assets (i.e. beds, dressers, TVs, etc.)
  • Staff and Business Conditions
  • Branded chains vs. non-branded
  • Hotel vs. motel
  • Amount of Parking
  • Location
  • And more

It may be challenging to tally all of your assets into one magic number. Hotels and motels are sellable all around the country. With this in mind, it is not difficult to check online marketplaces to see the average hotel and motel prices in current market conditions.

Taxes Paid on the Selling Hotels and Motels

When piecing it all together, both hotels and motels can be sold for enormous amounts of capital. Since the dawn of time civilization, however, taxes have been taken out of large property sales, and hotels and motels are no exception.
In the United States, the following are paid on the sale of a hotel or motel:

  • Federal Income Taxes
  • Capital Gains Taxes
  • Depreciation Recapture
  • Sales Taxes
  • Local Taxes
  • And More

So clearly, taxes will add up when selling a motel. Of course, capital gains taxes are deferrable if trading a hotel or motel with a 1031 exchange.

1031 Exchange Hotels and Motels

With a 1031 exchange, hotels and motels can be traded for properties of equal or greater value in order to fully avoid any capital gains tax imposed. Properties must be bought and sold by the same taxpayer and deadlines must be met as per IRS regulations.

With this in mind (and the idea of filling out detailed government paperwork), we highly recommend using a 1031 exchange intermediary to handle the tax process and/or assist with the property identification.

Hotels and Motels Like-Kind Properties

According to the IRS tax code, 1031 exchanges are only valid if the properties bought and sold are of “like-kind.” Essentially, what this means is that the assets in question must bear at least some kind of similarities. Thankfully, hotels and motels are considerable as both property and business entities. This allows them to be go through the exchange for a large number of like-kind properties.

This includes:

  • Apartments and apartment buildings
  • Single-family homes and condos
  • Trailer Parks
  • Farms
  • Water and Ditch Rights
  • Mineral Rights and Royalties
  • And much more

Hotels and Motels 1031 Exchange Timeline

Once a hotel or motel is sold, taxpayers have 45 days to identify at least one property that can be considered for the 1031 exchange. This property does not necessarily need to be the one purchased, but an asset must be acquired within 180 days of the sale for a valid 1031 exchange. Up to 3 properties can be identified, regardless of their value.

For additional requirements, please see our 1031 Exchange Rules and Requirements Page.

What to 1031 Exchange Hotels and Motels For

Of all of the property assets that can be bought and sold in the world, mineral rights and royalties are one of the only ones that are unique to a few countries. Here in the United States, the acquisition of mineral rights can lead to extensive mineral royalty payments under the right oil and gas lease.

While a hotel or motel requires frequent decision-making for the continuous operation of the property, active mineral rights are a rarely-seen, yet a highly-desirable piece of many great investment portfolios.

Conclusion

Hotels and motels have been around forever and will likely continue to function as a large chunk of commercial real estate property throughout the world. With this in mind, hotels and motels are bought and sold constantly, sometimes out of desperation and other times out of pure profit.

Either way, when selling a motel or hotel, a 1031 exchange is great for quickly reinvesting your money with the least amount of capital losses in the process. In the United States, mineral rights and royalties should always be considerable as a great opportunity for return on investment.

1031 exchange gas stations

1031 Exchange Gas Stations [Ultimate Guide]

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For first-time sellers and experienced investors, gas stations can be purchased, improved, and sold for tremendous profit margins. There are more and more cars on the road every year. That is the reason why gas stations are a staple of the American road system. It is providing food and fuel to travelers on roads both large and small. Today, the sale of a gas station can be maximized by using a 1031 exchange. In trading for another property, capital gains taxes are deferrable and more of the proceeds from a gas station sale are useable for reinvestment. In this article, we will explain and outline the steps that need to be taken in order to 1031 exchange gas stations. With that, we will also make the case for mineral rights and royalties. They are one of the best possible ways to continue to benefit from the sale.

How to Sell A Gas Station

In order to 1031 exchange gas station, you must first obviously sell it. Selling gas is easy, but selling a gas station isn’t as so. Gas stations are a highly specialized kind of property unlike any other commercial real estate of its kind. Knowing this, the process of selling a gas station may be more laborious than you originally anticipated.

With that, gas stations are located practically everywhere across the country. It is as nearly every town in America is home to one or two. This familiarity makes the sale of a gas station more likely among investors looking to buy a property type that has stood the test of time.

For the most part, gas stations are sold with the help of a specialized, commercial real estate agent. This is most commonly true in big cities and towns. However, in highway communities across the country, a gas station may likely be one of the highest valued properties in the area.

Determining the Value of A Gas Station

Today, gas stations are typically sold in online listings or through word of mouth. Gas stations are sold on the open market and can only truly be valued by the highest purchasing bid. Although some abandoned facilities will go to auction, typically gas stations are sold after negotiations of a predetermined sales price.
As the sum of many different parts, the total value of a gas station can be determined by summing the following considerations:

  • Property size and condition
  • Number of buildings, size, and conditions
  • Number of filling stations
  • Bonus facilities (car wash, air pumps, etc.)
  • Branded affiliations (both for store and gas pumps)
  • Business records, profit and loss statements, etc.
  • Transferable employees
  • Current supply chain relationships
  • And more

So clearly, there are a ton of things to consider before putting a price on your property. If possible, locate the properties appraisal records, as well as the previous listing prices for other gas stations in the local vicinity.

Taxes Paid on the Selling Gas Stations

As both a business and a property, gas stations are often sold for significant amounts of money. Of course, for every dollar that a gas station is sold for, more taxes are applied to the sale by local and federal governments. When selling a gas station, the following are usually applied:

  • Federal Income Taxes
  • Capital Gains Taxes
  • Sales Taxes
  • Local Taxes
  • And More

1031 Exchange Gas Stations

Of course, savvy investors trying to pinch every penny from their sale are well aware that 1031 exchanging gas stations can partially or completely eliminate capital income taxes paid on the sale of a gas station. By “trading-up,” for a new property, the IRS allows for capital gains taxes to be avoided if the same taxpayer simply reinvests their money elsewhere.

Gas Station Like-Kind Properties

Of course, you can’t use a 1031 exchange to trade just anything for a gas station. Instead, the property must be considered to be “like-kind” in the eyes of the IRS. Thankfully, most physical assets qualify as similar enough to gas stations in order to qualify for a 1031 exchange.

For instance, the following can be considered like-kind properties:

  • Strip malls and shopping centers
  • Trailer parks
  • Hotels
  • Water and ditch rights
  • Mineral rights and royalties
  • Farms
  • Office buildings
  • And more

1031 Exchange Gas Station – Timeline

Gas stations can take a considerable amount of time to sell, so it is a good idea to consider what you might use a 1031 exchange to purchase even before you are headed to a large check. This is especially true because at least one property must be identified in the first 45 days after the sale of a gas station. Beyond that, taxpayers have just 180 days, or roughly 6 months to purchase a new property in a 1031 gas station exchange.

Failure to meet deadlines and file paperwork on time is typically not forgiven by the IRS. With this in mind, it is strongly recommended to work with a 1031 exchange intermediary when maximizing the reinvestment of your funds.

For additional requirements, please see our 1031 Exchange Rules and Requirements Page.

What to 1031 Exchange Gas Stations For

Mineral rights and royalties are highly profitable ventures that many American investors are still unaware of. The truth is, for the past 100 years, mineral rights owners have been leasing their subsurface property to oil and gas companies in exchange for sizable mineral royalty checks.

In a sense, selling a gas station and purchasing mineral rights is kind of like selling your house and buying a quarry that exports building materials. By going “back to the source,” an investment in mineral rights is a largely passive income stream that does not require the maintenance and upkeep as a gas station does.

Conclusion

In conclusion, gas stations are highly valuable, which is why it is important to maximize the proceeds when selling one on the open market. By utilizing a 1031 gas station exchange it is possible to defer tens of thousands of dollars in capital gains taxes that would have been otherwise paid. Although the choice is yours to reinvest in any kind of property, mineral rights and royalties are an easy way to stay profiting in the oil industry with significantly less time and effort.

1031 exchange condominiums

1031 Exchange Condominiums [Ultimate Guide]

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Condominiums, or simply “condos,” are a great way to purchase property to live in, rent out, or resell. Sort of halfway between an apartment and a home, condominiums make for a great living situation for many people.

With that, the sale of a condo is likely to flood former owners with a large sum of cash. For first-time flippers and experienced investors, using a 1031 exchange is a great way to get the most out of your sale with a smart reinvestment.

In this article we will detail everything there is to know about 1031 exchange condominiums, and why mineral rights and royalties are the perfect property upgrade.

How to Sell A Condominium

Do you remember when you bought your condominium? It was pretty easy, right?

Well, good news, selling a condominium is usually just as simple. Although we’ve all heard our fair share of property nightmare stories, condominium real estate exchanges are usually fairly straightforward and easy to navigate.

So long as there is buyers’ interest, condos can be sellable in just about every way imaginable. Most commonly, this includes:

  • Hiring a Realtor to Market the Home
  • Selling By Owner
  • Yard Signs
  • Online Listings
  • Newspaper Ads
  • Word of Mouth, etc.
  • Reselling to the Builder
  • Gifting or Bequeathing to Friends and Family

Determining the Value of Your Condominium

The great thing about condominiums is that there are so many similar properties surrounding each and every one of them. Finding the value of your condominium may be as easy as knocking on your new neighbor’s door and asking how much they paid.

Of course, condominium value is also impacted by many individual variables including:

  • Number of Previous Owners
  • Pet History
  • General Condition
  • Appliance Upgrades
  • Number of Units
  • Community Amenities
  • Market Fluctuation
  • And more

In general, condominiums follow normal real estate market trends. In booming areas, value can fluctuate just as in cities with lowering populations. For long-term owners, a condominium is usually sold at a similar or greater price than it was purchased.

Taxes Paid on the Selling Condominiums

Even if you are selling your condo without the help of a realtor, accountant, or broker, you will still have to pay taxes on the money earned from the sale. Although the percentage of the gross amount varies by region, state, and city, most people pay the following on the sale of a condominium:

  • Capital Gains Taxes
  • Federal Income Taxes
  • Sales Taxes
  • Local Taxes
  • And More

Although most people say that the only two things that are certain in life are death and takes, it is possible to avoid some taxation with smart money management. You may not be cheating death, but a 1031 exchange can be used to reinvest the money from the sale of a condominium into another profitable property.

In doing so, you can eliminate all of the Capital Gains Taxes that you would have otherwise paid to the IRS that calendar year.

1031 Exchange Condominiums

1031 exchanging condominiums is very easy. However, it does take a considerable amount of effort and careful attention to detail.

If you would rather save time and possibly earn more on a 1031 exchange investment, there are many industry experts available to help identify similar properties, meet deadlines, and process legal documents.

Condominium Like-Kind Properties

First and foremost, a 1031 exchange gets its name from the requirement to “trade” a condominium sale for another property. The IRS permits most other land-based properties as “like-kind,” including:

  • Mineral Rights and Royalties
  • Parking Lots
  • Shopping Centers
  • Trailer Parks
  • Water and Ditch Rights
  • Apartments
  • Homes
  • Farmland
  • And More

1031 Condominium Exchange – Timeline

To start, you have 45 days to identify at least one reasonable like-kind property from the sale of your condo. By reasonable, the law dictates that it should be not only like kind, but also of similar or greater value.
1031 exchange qualification expires after 180 days if a new property is not purchased. After 180 days, capital gains taxes are no longer withheld from the sale of the condominium. A maximum of 3 like-kind properties can be identified without having to factor in their value.

For additional requirements, please see our 1031 Exchange Rules and Requirements Page.

What to 1031 Exchange Condominiums For

Mineral rights are the total or partial ownership of the subsurface of a plot of land. In the United States, they are available to purchase just as any other property like condos, farms, and homes.

If your dreams of renting the condo out to paying tenants have not matched your expectations, mineral rights are another great way to earn monthly income from owning property.

Each month, leased oil and gas companies are able to extract, process, and sell oil and gas from the mineral rights property that you own. In most cases, you may never even see the operation, however, a monthly oil and gas royalty check will be paid to your name as a fixed percentage of the resource sales.

How to Maximize Your 1031 Condominium Exchange

If you’ve spent too much time in your condo in the city, mineral rights may be a new concept for your investment portfolio. However, states like Texas, Colorado, Pennsylvania, and more contain highly valued mineral rights properties that are both active and waiting for resource extraction.

Mineral rights are valued on their estimated remaining reserve capacity as well as the percentage ownership as granted by the contract.

Conclusion

If you’re selling your condo, consider using a 1031 condominium exchange to purchase mineral rights and oil and gas royalties. In doing so, your reinvestment will not only eliminate capital gains taxes (potentially $1,000’s of dollars) but may also lead to steady monthly income from the sale of natural resources.

1031 exchange trailer park

1031 Exchange Trailer Parks [Ultimate Guide]

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If you own a trailer park, it can be difficult to part ways with your property. After all, having a lot of tenants in a trailer park can lead to a nice monthly income stream. Speaking of unreliable rent payments, frequent upkeep, and neighborhood issues? How about completely unrelated circumstances? These may have you thinking that perhaps there are better ways to invest your money. Introducing 1031 Exchange trailer parks opportunities.

Well, guess what, mineral rights and royalties are another great way to earn a monthly income. You will never have to knock on a trailer door again (unless you visit the drill site). With a 1 1031 exchange, you can maximize the sale of a trailer park. This is by turning it into valuable mineral rights and royalties.

In this guide, we will explain how to 1031 exchange tailer parks as well as go over some key questions you may have such as how to determine the value of your trailer park, how to identify a like-kind property, and more.

How to Sell A Trailer Park

First things first, you’ll have to sell the trailer park. Do you own it for a number of years? Then you are probably well aware that this will not be a difficult step. In fact, trailer parks are one of the lowest multi-unit property investments that can be made today.

With a relatively low barrier of entry and the potential to earn a large sum of monthly rent payments, finding a buyer for a trailer park is rarely a difficult task. Here are a few of the most common methods trailer park owners sell their property:

  • Word of Mouth
  • Selling to an Existing Tenant (Or Shared Group_
  • Online Listings
  • Physical Signs
  • Realty Agents
  • And more

Determining the Value of Your Trailer Park

The value of a trailer park is determined by many factors, some of which can be controlled, while others are strictly circumstantial. In truth, a trailer park is more than just the sum of its property assets, as paying tenants dramatically increases the approximate value of a trailer park investment.

To best determine the total ballpark value of a trailer park, one must consider:

  • The Size of the Property
  • The Current Occupancy Percentage
  • Vacant Lots and Possible New Developments
  • The State, County & Municipality
  • Energy Sources and Rates
  • # of Tenants and Tenant History
  • And more

Of course, a trailer park is going to be as valuable as the highest-paying investor. It is always recommended to get multiple bids, appraisals, and offers when selling a trailer park.

Taxes Paid on the Selling Trailer Parks

Unless you’re taking the cash and headed out of the country to live as an outlaw, there are going to be a hefty amount of taxes to be paid when selling a trailer park. Although they will vary from state to state, the following taxes may be taken by local, state, and federal governments:

  • Income Tax
  • Capital Gains Tax
  • Sales Tax
  • Local Taxes
  • And More

Of course, one of the best ways to reduce the amount of tax paid on the sale of a trailer park, is by using a 1031 exchange.

1031 Exchange Trailer Parks

With a 1031 exchange, a trailer park can be sold and “exchanged” for another asset of greater or equal value.

According to the IRS, the assets must be similar “like-kind” properties. When a trailer park is sold and the property is purchased with 1031 exchange, capital gains taxes will not be applied to the original sale.

Like-Kind Properties for the Sale of Trailer Parks

Although they may not physically resemble some of the similar properties outlined by the IRS, trailer parks can be used in a 1031 exchange to purchase a number of different assets without paying any capital gains tax. Most commonly these include:

  • Mineral Rights and Royalties
  • Apartment Buildings
  • Farms
  • Strip Malls and Businesses
  • Parking Lots
  • Self Storage Facilities
  • Commercial Buildings
  • And More

1031 Exchange Trailer Parks Timeline

After the sale of a trailer park, taxpayers have 45 days to identify at least one like-kind property they are interested in purchasing in order to use a 1031 exchange. Up to 3 properties can be identified regardless of their value. Other limits also apply.

After narrowing down the potential investments, new properties must be purchased within 180 days of the sale of a trailer park in order to qualify for a valid 1031 exchange.

Using an Intermediary to 1031 Exchange Trailer Park

In order to make sure that deadlines are met, paperwork is filed, and the absolute pest properties are identified and purchased, we highly recommend using a 1031 exchange intermediary. Taking the legal and tax weight off of your shoulders will not only save you time, but will also save you a considerable amount of money.

What to 1031 Exchange Trailer Parks For?

As a “like kind” property, both mineral rights and mineral royalties can be purchased in a 1031 exchange after the sale of a trailer park. In some cases, active mineral rights will land investors in a stream of steady income payments for the sale of extracted minerals. On other properties, untapped mineral rights can be flipped, sold, or leased to an interested oil or gas company.

The short answer here is yes: mineral rights are generally going to be a good investment. Although gas, oil, and coal prices may fluctuate from time to time, the market is always going to be strong while large companies identify cost effective ways to extract and use the valuable resources from below the surface of the earth.

How to Maximize Your 1031 Exchange

In order to maximize your 1031 exchange (and minimize the amount of tax you pay), you will want to purchase profitable mineral rights at a reasonable rate. Talking to industry experts, and reviewing a large number of potential mineral rights opportunities is the best way to lower the risk in your investment.

Conclusion

Ultimately no matter how sentinel you may be, selling a trailer park for a lump sum of cash is going to feel pretty good. In order to keep more of that money in your theoretical pockets, a 1031 exchange is a great way to defer capital gains taxes with the acquisition of a new property. With mineral rights and royalties, your investment will go further, as profits from the sale of oil and gas production is a valuable asset in any portfolio.

If you have further questions about 1031 exchange trailer parks, feel free to contact us here.

1031 exchange farmland

1031 Exchange Farmland [Ultimate Guide]

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So you’ve finally done it, you have decided to sell the farmland. Do you have a large sum of money heading towards your bank account? Unfortunately, federal capital gains taxes are applicable. Federal capital gains taxes can take up to 20% of the sale price from your farmland. This is depending on your annual salary,

In this article, we will outline the steps necessary to 1031 exchange farmland into mineral rights and royalties completely tax-free.

How to Sell Farmland

Of course, you can 1031 exchange farmland only once the property is sold. There are a few ways to go about this. On one hand, you can try selling your farmland by yourself. On the other hand, you can utilize a specialized broker or real estate agent. This is for them to do all of the work for you (at a price, of course). As there is a considerable amount of work to, we strongly suggest working with a professional.

Determining the Value of Your Farmland

For most people, farmland includes most if not all of an individual’s assets. What to do to determine the final sale price (and sales tax) associated with farmland? The property and everything it contains should go through appraisal. Most commonly, the sales price of farmlands in the United States is largely by:

  • The Amount of Land
  • # of Buildings and Size (Homes, barns, storage, etc.)
  • Equipment (tractors, irrigation systems, bailers, etc.)
  • Livestock (cows, horses, etc.)
  • Supplies and Inventory (crops, fertilizer, etc.)

Taxes Paid on the Sale of Farmland

All in all, the sale of farmland can bring in a considerable amount of money. With that in mind, it is always going to be taxable in some form or another. Currently, the following taxes are applicable to the sale of farmland in the United States:

  • Federal Income Tax
  • Recapturing of Depreciation
  • State Taxes
  • Federal Gains Tax

All in all, the amount of tax imposed on the sale of farmland can range anywhere from between 20% to 50%. This is depending on all of the variable conditions. With that, eliminating any of the taxations is a surefire way to save a bit of money during the sales process.

1031 Exchange Farmland

As we mentioned earlier, using a 1031 exchange is a great way to lower or eliminate capital gains taxes on the sale of farmland. A 1031 farmland exchange is useable when another property that is under purchaseis similar to it. In buying a “like-kind” asset, former farmland owners are not required to pay capital gains tax on the sale of their estate.

1031 Exchange Farmland – Requirements

In order to qualify for a reduction in capital gains tax with a 1031 farmland exchange, the following timeline must be true:

  • The same taxpayer sells and purchases both assets.
  • New properties must be identified within 45 days of the sale of the farmland.
  • The new property must be purchased within 180 of the sale of the farmland.

Of course, to qualify for a full elimination of capital gains tax, the new property must be of equal or greater value (i.e. trading up). Up to three properties can be identified as potential purchases regardless of their value. For more information on the rules and regulations for using a 1031 exchange, feel free to read our detailed page on the 1031 exchange process.

Farmland Like-Kind Properties

In order to 1031 exchange farmland, the same taxpayer must purchase a new property that is similar to the old one. For the sale of farmland, there are many options within the realm of property that can be exchanged for, completely tax-free. Most commonly, farmland sales are exchanged for:

  • Better Farms
  • Livestock
  • A Home or Apartment
  • Water and Ditch Rights
  • Vacant Land
  • Mineral Rights and Royalties

Using an Intermediary to 1031 Exchange Farmland

In order to make sure the process goes as smoothly as possible, using an intermediary to 1031 exchange farmland is the smartest way to go. Utilizing the knowledge and resources of a licensed professional will not only help you save the most on taxes but will make the process easier along the way.

Ranger Land and Minerals has over 100 years of combined industry experience transforming assets into profitable mineral rights and royalties through 1031 exchanges. Our team of professionals is here to help leverage your farmland for the best possible mineral rights and royalties.

Maximizing Return on Investment

Once you sell the farmland, putting the money into something brand new such as mineral rights or royalties can be very intimidating. However, with the right purchase, your farmland very well may transform into a passive stream of income, profitable beyond any back-breaking labor tending to crops or livestock.

Purchasing Active Mineral Rights: With active mineral rights, cash flow is generated each month as mineral royalties are divided among stakeholders every single month. 1031 Exchanging for active mineral rights can lead to an immediate and ongoing income stream.

Purchasing Non-active Mineral Rights: Alternatively, mineral rights in high-production areas can also be profitable even if they are not currently being used by an oil or gas company. Non-active mineral rights can be bought and sold for profit, or retained through an oil and gas lease. Depending on your negotiation, new oil and gas leases can lead to steady income for years on end.

What to 1031 Exchange Farmland For

More than anything, investments into mineral rights and royalties are a great way to reinvest the capital derived from the sale of farmland. Mineral rights entitle landowners to the valuable resources found below the earth’s surface. Mineral royalties are earned when those resources (such as coal, natural gas, or oil) are extracted and sold in the marketplace.

Ultimately, selling your farmland is a tough decision. Once you’ve done it, however, your next step shouldn’t be so tough. 1031 exchanging farmland to purchase mineral rights or royalties is a great way to reinvest your money without having to pay a capital gains tax. With the right purchase, mineral rights can be a very valuable asset in any portfolio.

mineral-rights-101

Mineral Rights 101: A Guide to Everything that You Own Below Your Property

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If you bought your property in a fee simple estate, that means that you own your surface rights as well as what lies below your property. For those that are new to mineral rights, we’ve put together this Mineral Rights 101 quick guide to help you understand what exactly you own.

What are Mineral Rights?

Mineral rights are a property’s ownership rights of any resource that is found beneath the surface of the earth. Mineral rights can only be owned by individuals in a few countries around the world, including the United States.

Do I Own My Mineral Rights?

Usually, mineral rights ownership is defined in relation to surface rights. Surface rights, as you can imagine, entitle the owner to the surface and structures on the land.

The two most common forms of land ownership are fee simple and split estates. In a fee simple estate, you own every asset in the property from subsurface rights to the air above your house. In a split estate, the property rights can be sold to another person or group of individuals. Check your deed to see the specific information on your mineral rights ownership.

Things that You Own with Your Mineral Rights

Mineral rights designate the ownership of valuable resources such as oil, gas, gold, silver, copper, iron, uranium, etc. In order to extract and sell these minerals, most people choose to sell or lease their mineral rights to an oil and gas company. Here, the oil and gas company would need some access to your property’s surface to explore and obtain the resources.

Things that You DO NOT Own with Your Mineral Rights

Of course, it can get a bit complicated when trying to define what “resources” you actually own. Typically earthy materials (like sand, limestone, gravel, etc.) belong to the surface rights owner. Likewise, even if the water is in the plot’s subsurface, water rights are typically owned by the property’s surface rights owner.

Image Credit: Joel Deluxe/via Flickr

If you have further questions related to this mineral rights 101 guide, feel free to reach out to us here. 

Oil and Gas Royalty Deductions

Oil and Gas Royalty Deductions Guide for Tax Season

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There are only a few better feelings than getting your oil and gas royalty check in the mail. Whether you have decided to lease your mineral rights or you have aided in an operation’s production, the extraction and sale of oil or gas earn you a nice bit of money each month. Of course, all is fun and games until tax season. In this article, we will outline the most important things to know about oil and gas royalty deductions.

Depletion Allowances for Oil and Gas Royalties

Mineral rights are very valuable, that is until the resources have all been depleted. The IRS recognizes this and permits a depletion allowance on oil and gas royalty payments. Depletion allowances let property owners deduct the loss of value in the property’s subsurface, as well as any incurred expenses associated with owning the royalties.

Here, taxpayers can write off a portion of their income. Most commonly, people choose the standard 15% depletion deduction from the gross income. In other cases, heavily invested individuals can calculate the approximate remaining oil reserve. From there, they base their deduction on the amount of extraction that tax year.

Oil and Gas Royalty Deductions

Once your royalty checks start coming in, you may notice something. Usually, it is that there are some taxes that are out of your payment. Although the amounts vary between states, most U.S. states take out a severance tax on oil or gas production. This amount can be a deduction from your gross income. This includes any other business taxes or fees that have an association with the production.

Bonus Deductions

If you signed an oil and gas lease, then you may have received a nice upfront bonus payment. In the eyes of the IRS, this is considered ordinary income, in the rental property classification. There can be a deduction on your Schedule E on any bonus payment you receive. This includes any costs (like legal fees) in association with the lease negotiation.

If you have further questions about oil and gas royalty deductions, feel free to reach out to us here. 

getting oil companies to drill on your land

How to Get Oil Companies to Drill On Your Land

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If you own mineral rights in the United States, you may be sitting on a potentially large stream of income. Thousands of property owners across the country have contacted oil companies and investors in order to drill and profit from the precious minerals in Earth. This is your guide on how to get oil companies to drill on your land too.

In general, this is accomplished one of two ways: by selling or leasing mineral rights. In this article, we are going to explore the pros and cons of selling or leasing your mineral rights as you seek to find an answer on how to get oil companies to drill on your land too.

Selling Your Mineral Rights

When you sell your mineral rights, an interested party becomes the owner of your property’s subsurface and has the right to explore it for valuable minerals. Aren’t you selling directly to the oil company? Then, the buyer likely has plans to start or continue a drilling operation.

Pros of Selling Your Mineral Rights

  • Mineral rights sales are generally settled with large lump sums of cash.
  • The sale of mineral rights is eligible for a 1031 exchange, which can be used to strategically acquire another property without the income tax.
  • You will no longer have to pay taxes on your mineral rights or oil royalties.

Cons of Selling Your Mineral Rights

  • Your mineral rights have the potential to become more valuable in the future.

Leasing Your Mineral Rights

Alternatively, if you do not want to give up your mineral rights entirely, you have the option to sign an oil and gas lease. In a mineral rights lease, you can sign a temporary agreement. This is to let an oil and gas company explore, procure, and sell minerals from your property.

Pros of Leasing Your Mineral Rights

  • You may receive an initial bonus, and signing payment.
  • If the production is successful, you will earn oil or gas royalties on the precious minerals produced.
  • You still maintain ownership of your mineral rights and have only agreed to the temporary exploration of the site.

Cons of Leasing Your Mineral Rights

  • Leases dependent on large oil production levels may not cash out as well as expected
  • Oil lease ownership can change hands without your involvement.

Contacting the Right People

Once you have decided whether a lease or sale is best for your mineral rights, then it becomes time to get into contact with the right people. There are many companies and individuals who are going to be interested in acquiring the right to drill on your land for oil or gas, so it is important to work with someone you can trust. Ranger Minerals is a Texas-based company with over 100 years of combined industry experience that can help with mineral rights transactions all across the country.