1031 Exchange – Benefits and Rules

Section 1031 of the IRS offers a golden opportunity for real estate investors to defer their capital gain taxes by reinvesting their sales proceeds in purchase of another like kind property. One important condition that governs this law is that the transaction needs to take place within 45 days of selling the property.

The benefit potential of a 1031 exchange can be better comprehended if we look into a case study…

An investor gains $400,000, by selling his land and incurs a total tax amount of $120,000. He is left with $280,000 after the transaction is complete.

If the seller wants to reinvest the proceeds for a new property, considering a 25% down payment with 75% loan to value ratio, he will be able to buy a property worth $1,120,000.

Had this been a 1031 exchange the seller could reinvest the entire sales proceed of $400,000 and with same loan to value ratio he could have availed a property worth 1,600,000.

With the increasing awareness about 1031 exchange and its benefits more and more people are investing in real estate, however, to gain the maximum out of it, it is important that we have a clear understanding of all the terms and conditions mentioned in this section of the IRS.

The rules for a successful 1031 exchange has been clearly laid down in section 1031 of the IRS and can be explained as given below.

• The foundation of 1031 exchange rule is that only properties held for productive purpose in a business or trade or for investment purposes qualify for a 1031 exchange.


• The properties involved in the transaction should also be of like kind. Under Section 1031, one kind or class of property should be exchanged for another property of the same kind or class. A taxpayer's personal residence cannot be exchanged for income property, and income or investment property cannot be exchanged for a personal residence, which the taxpayer will reside in.


• Section 1031 of the IRS also marks the guidelines about the sales proceeds. It stated that the entire amount from the sales proceeds should be reinvested towards acquisition of the new property. The sales proceeds should also go through the hands of a qualified intermediary and not through the seller or the seller’s agent. Any cash proceed from the sale, if retained, becomes taxable.


• For a successful 1031 exchange there are also some time limitations laid down in Section 1031, which needs to be followed.
  
  Identification Period: This is a 45 days period from the day of selling the relinquished property during which the seller needs to identify a replacement property that he proposes to buy. This is a strict timeline and is not extended even if the 45th day falls on a holiday or on weekends.
  
  Exchange period: This is the period within which the seller of the relinquished property needs to receive the replacement property. This period ends at 180 days after the date on which the person transfers the property relinquished or the due date for the person's tax return for the taxable year in which the transfer of the relinquished property occurred, whichever is earlier. This is a strict timeline and cannot be extended even if the 180th day falls on a holiday or on weekends.

These are some of the basic rules that need to be followed to complete a successful 1031 exchange. While qualified intermediaries are an indispensable party to a 1031 exchange transaction and can often provide good advice, it is advisable that you do proper study about this section of the IRS and consult a knowledgeable company for professional advice on 1031 exchange.

Choosing the Right Survey Software

As the business environment grows continually more competitive, corporations are scrambling to find ways to gather as much information as possible about customer requirements, market trends and other strategic data. Conducting surveys has always played an important part in such data gathering and the escalating number of survey software solutions available in the market has made it relatively simple for a company to set up and conduct surveys. However, the vast number of choices makes choosing the correct survey software an overwhelming job.

Buying business software has always been a critical job and deciding on the right survey software is important. In addition to choosing the software features your company needs, you also have to consider price, support, ease of operation and various other factors that before deciding on a survey software.

Survey software generally falls into two categories. The first type gets installed on your computer and allows you to run the show yourself, and the other type is a hosted application on the web that can be accessed from any computer on the web. The second type gives you the flexibility of operating your software from anywhere on earth.

Check the Features
Conducting a survey consists of several small steps, beginning with getting the list of email/phone numbers of prospective candidates, sorting the list, creating the questionnaire, presenting it to the candidates, collecting data and then sorting and analyzing the data. You should check the features of the survey software carefully to be certain that it meets all of your business needs.

Don’t make the $100 mistake
Compare prices of similar software but don’t just concentrate on the price. People often make the mistake of settling for one product over another to save $50-$100 and compromise a host of features which may have ended up being essential, and then have to purchase plug-ins later at a much higher price.

Support
Before buying software, always confirm the level and price of customer and technical support provided by the manufacturer/seller. It is possible that you might not be in a position to understand the intricacies involved in installing the software or using some of its features. Good software always comes with a proper support plan to help you to get the much-needed assistance for the maximum benefit from your survey software.

Trial Period
Most good survey software would offer a free trial period. Try to take advantage of those offers and take trial run to see if it meets all your requirements.

Software Review Websites
Several websites provide detailed review and scoring of various software. Visit those websites and read the details, these websites provide impartial judgment about the software and give details about the features of the software. These days there are websites that specifically provide Survey Software reviews making your work easier.

Surveys are one of the most effective tools to gather research data. With all the above tips you are sure to find just the right type of survey software that you need to lay the foundation of your research success.

Business Cash Advance – The Easy Way to Finance Your Business

Running your own business is always a challenging job and the challenge becomes even more difficult when there is a fund crisis. Every business, small or big has experienced this situation where you need immediate financing to support your daily business activities and you are running short on cash. So what are the solutions?

While effective working capital management can reduce the occurrence of such situations, it is more than likely that businesses will still have need for funds, may it be to meet the recurring expenses, buy capital equipments or to expand the existing business.

Business owners has traditionally being dependent on business loans to meet such fund requirements, however, business loans are probably the worst type of liabilities that any entrepreneur would like to shoulder. They would require a collateral, a high rate of interest and fixed payment terms – business owners often risk losing their assets that they put as collateral in case they fail to make timely payments. With all these issues making business loans a negative option for entrepreneurs sets them on a hunt for a better finance option. Business cash advance is just that!

Business cash advance is one of the most popular financing methods for businesses. Cash advance providers would buy a predetermined number of Visa and Master card receipts from business owners and provide them with business cash advance in lieu of those receipts. The amount that the seller receives is not a loan and it is a cash advance paid against the Master and Visa card receipts and is paid back through the merchant account. The borrower need not repay the amount personally.

Unsecured business cash advances are available and the business owner would not require any collateral to get an unsecured cash advance. Also the borrower is not personally liable to repay the business cash advance. The business owner can sell his future credit card receipts at a discounted rate to avail a business cash advance. This is very much similar to Factoring, except for the fact that in factoring business-to-business invoices are discounted where as in this case your credit card receivables are factored.

There are no fixed payment schedules for a business cash advance and only the credit card sales receipts are used for repayment of a business cash advance. All other payments received through cash, check or other credit cards are left with the borrower. This ensures that he has sufficient funds to run his business while the cash advance also gets repaid through the Visa and Master card receipts.

Not only is Business cash advance an easier finance solution from repayment perspective but also it is easier to get. The general criteria required to qualify for a business cash advance are:

• The business must accept Visa or Master Card as a mode of payment


• The business must process a payment of $1500 or more in a month


• The business should have been there for at least 2 years.


• Credit card statement and bank statements for 3 month for seasonal business and 12 months statement for non-seasonal business should be available.

Most business cash advance companies would have similar conditions probably with some modifications here and there. These makes it easy for any business that accepts payments through credit cards to qualify for a business cash advance.

With this easy to get and easy to repay options, business cash advance has been the finance of choice for most business owners and especially small business owners are taking the maximum benefit of from business cash advance. If you are a small business owner, act now and get a business cash advance to take your business to the next level.