Navigating complex tax strategies and deliberate portfolio creation can seem overwhelming, but at Baker 1031 Funds, we simplify and streamline the conversation so that more investors can understand the benefits of tax-advantaged real estate investments.

Navigating a 1031 exchange? Learn about like-kind property rules, avoiding boot, and the benefits of Delaware Statutory Trusts (DSTs) for tax-deferred real estate investment. Understand the do's and don'ts of §1031 exchanges and explore diversification strategies.

Private commercial real estate (“private real estate”) refers to investments in, or ownership of, institutional-quality properties that are generally either multifamily or business-occupied buildings. Investors can gain exposure to this asset class by investing in properties directly or through pooled investment vehicles that are managed by a third party and not listed on a publicly traded exchange.

The tax benefits of investing in QOZs may be enticing for those with capital gains. Investors with realized gains must place the realized gains into a qualified opportunity fund within 180 days from the date of the sale or exchange of the appreciated asset. The cost basis of the property is determined to be equal to the fair market value of the date of sale and no tax is calculated on the appreciation of the asset.

Investors looking for ways to defer capital gains tax while diversifying their portfolio may turn to an Internal Revenue Code Section 721 exchange tax mitigation strategy.

By leveraging a 1031 exchange, high net worth clients may have hundreds of thousands of dollars more available for reinvestment into other real estate assets.

Qualified Opportunity Zones (QOZs) and 1031 exchanges are both tax-advantaged strategies available to real estate investors. However, each has its set of pros and cons, and specific requirements need to be met.

When it comes to evaluating a REIT’s benefits, investors should understand all tax advantages. Income distributions to REIT investors receive preferential tax treatment and can be compared to other investment vehicles on an after tax yield basis. After-tax yield takes into consideration the taxes that may be due on the distribution, and can be useful when comparing fully taxable investments to tax-advantaged investments.

Tax-Deferral Real Estate Strategies that every investor and financial professional needs to know.

Tax equivalent yield is a calculation that estimates the pre-tax return an investor would need from a fully taxable investment to match the after-tax return provided by the tax-advantaged DST investment.

A Delaware statutory trust (DST) permits fractional ownership where multiple investors can share ownership in a single property or a portfolio of properties, which qualifies as replacement property as part of an investor’s 1031 exchange transaction. A DST takes all decision-making out of the hands of investors and places it into the hands of an experienced sponsor-affiliated trustee.

Section 1031 of the Internal Revenue Code allows an investor to defer the payment of capital gains taxes that may arise from the sale of a business or investment property. By using the proceeds of the sale of such property to purchase “like-kind” real estate, taxes may be deferred, as long as the investor satisfies certain conditions.