Section 1031 of the Internal Revenue Code is most often used in connection with the sale of real property. If you have been in the real estate market looking for a way to invest money and defer taxes, you may have heard about ‘Like-kind exchanges’ or ‘Tax Deferred Exchanges’ as a possible means to accomplish your goals. These are alternate names for what is commonly known as a 1031 Exchange.
This is a simple transaction that allows you to exchange properties of like-kind and defer the taxes. The transaction is simple, but understanding the process may not be! What property qualifies? Here are a couple of examples of what does not qualify:
- 1031(e) livestock of different sexes do not qualify for like kind exchange.
- 1031(h)(1) real property outside the United States and real property in the United States are not of like kind.
I was surprised about 1031(e) and I’m sure you are.
This might be your 1031 “Like-Kind”.
What is the difference between a second home and a vacation home? What taxes are being deferred? How long are taxes deferred? How does this benefit me? As a buyer, should I consider entering into an identified 1031 Exchange? Do qualified exchanges have to be simultaneous? If not, how long do I have to complete a qualified exchange?
There are many more questions depending on each circumstance and it is in your best interest to get correct answers to the questions for your circumstances and not depending on an overview to make your decision. Your professional Realtor® will be able to give information, but a Realtor® is only part of the resources you need. Your Realtor® will identify properties for your consideration. Another team member should be a tax attorney and a CPA who are experienced with 1031 Exchanges. They can give answers to how a 1031 Exchange fits into your portfolio, and how a 1031 Exchange fits into your estate.
If you are interested in a 1031 Exchange in on the Charleston Coast, contact Dunes Properties.
Here is your March 2010 real estate market report for Folly Beach. There were 6 properties sold during March 2010. They included one lot on Little Oak Island, a Mariner’s Cay for $412k and an oceanfront property for $655k. The average sales price for the month was $393,400. This continues the downward trend on prices and it seems like many sales are pushing prices lower. This has resulted in a higher number of transactions, as buyers realize that prices are now within reach and pull the trigger on the island lifestyle they have been dreaming of.
Come on down to the island! The prices are fine!
If you have always thought that living at the beach was too expensive, then think again. In 2009 Q1, the average sales price was $438,000 and that has dropped to $401,000 in 2010 Q1. 22 properties sold in 1st Quarter 2010, compared to 11 in the 1st Quarter of 2009. The lower average sales price explains the reason for the increased number of sales. More people are able to move onto Folly Beach, leaving behind the feeling that it is too expensive to live on the beach. Increased demand typically signals the bottom of the market, so if this trend continues we could see prices rise in the future.
Now is a great time to buy a Folly Beach home because of the combination of low prices and low interest rates. Make sure you are working with someone who is an expert in the market and knows their way around the island. Please contact me here with any questions.
Folly Beach Real Estate – 843-425-6414
I have seen a Folly Beach lot that is available for the cheapest price I have seen in a long time. How much is cheap? Not $500,000. Not $300,000. Not even $200,000. Think lower. Click here to find out.
If you are a builder, or investor, or interested in living on Folly Beach this is a great opportunity. I can help guide you through all the due diligence regarding the property, and can walk you through the permitting and building process on Folly Beach. This is one of the lowest prices for land on Folly Island that I have seen in a long time. Call me for details or click here to contact me.
This Saturday March 13th, 2010, the streets of Folly Beach will turn green to celebrate Saint Patrick’s day, and Folly party-goers will race around Center Street competing for prizes in the annual pub crawl. Everyone please use caution, from what I understand, the open-container law will be lifted, but the streets will be open to traffic! Please be careful “crawling” from one pub to the next. A good time will be had by all, including me, so call me if you want to meet up! I’m buying!
This is an election year on Folly Beach and election day is April 6th. There are three candidates for the Mayor’s office, and seven candidates for City Council. Folly Beach Now is covering the election by providing information that will help voters make informed decisions. You will find answers to your questions about where the candidates stand, information about their backgrounds, and important meetings and dates.
*** If you need to register to vote, the deadline is March 6th ***
Running for Mayor:
Running for City Council:
Please contact me with any questions or comments.
You would be amazed what you can buy on the beach!!!
8 Properties sold in the month of January 2010 on Folly Beach, beginning this year with a healthy sales volume just like late 2009. The sales ranged from $225,000 to $550,000 with an average sale of $375,425. The low prices are the reason for the increasing number of sales. Buyers are beginning to bite on the great deals that can be had on Folly Beach.
Out of the 8 sales this month, 4 were some type of foreclosure or short sale situation. The banks are willing to go low. If you have an experienced agent, they can point you in the right direction to find these investment deals. If you are interested in buying or selling on Folly Beach, let an experienced professional guide your way. Contact me here:
There will be Mardi Gras celebrations on Folly Beach this Saturday February 13th, 2010 from 12-5 for the annual Folly Gras party and parade. Wear your beads and most colorful outfit and come down to Center Street and celebrate New Orleans style.
Live Music by:
|Jason and the Juggernauts|
|Oscar Rivers Band|
|Stratton Lawrence & Stratton Moore|
|DJ Ron in the park|
Parade trophies will be awarded for the following categories:
***Best Golf Cart***
- Decorated Floats, Golf Carts, Marching, & Alternative transportation only! NO CARS OR TRUCKS UNLESS THEY ARE PULLING A FLOAT! You must be in Mardi Gras costume to participate! We Welcome decorated pets!
- Must be at the Folly Beach Public Boat Landing by 1:30 pm for lineup
We have asked our restaurants to prepare special New Orleans food fare and Mardi Gras drinks beginning at 1 pm. There will also be a trophy awarded to a restaurant for Best Food Fare.
We will have live music set up at different locations on Center Street. The Parade will begin at 2 pm and start at the Public Boat Landing. When the Parade ends at the Holiday Inn, Indian, Huron, Hudson will reopen. There will be music, dancing and food in the streets provided by our own businesses from 1 to 5 pm.
Masks will be sold at City Hall for $2.00 first come first served. Free beads given with each mask.
The Folly Beach Arts and Crafts Guild will also be in the Park with their crafts and vendors.
If you have any questions, please contact Mary Cunningham at City Hall; 513-1836 or 708-1113.
Act fast on this opportunity to own an incredible Folly Beach deep water property for a steal! The builder has thrown his hands up and will let it go at auction prices to avoid foreclosure or short sale. This waterfront property will need to be finished which gives you a chance to add your tastes, and has awesome views of the Folly River Wait! It gets better, it is sold with a shared deep water dock! This is a huge home on Folly Beach for a fraction of what it should really cost. There were two available now only one left.
The Taste of Folly Beach 2010 was a great time with a great turnout. The streets were full of fans of Folly and their energy beat back the overcast skies, and warmed up the lower temperatures. The sun made an appearance here and there, which was a welcome sight for the many participating Folly establishments.The chili cookoff sponsored by Planet Follywood was extra competitive this year with over 30 entries. The awards were given out as follows:
1st place Ryan Galloway
2nd place Chef Aaron from Locklears
3rd place Chef Jonathan from Blu
Honorable mention Nick the kid
Brian Hawkins from the Folly Beach Crabshack won the server olympics, the finals featuread a photo finish with Brian winning by holding more beverage in his two cups.
The hot dog eating contest was entertaining. The winner ate 6 hot dogs, and there were images that conjured up memories of “Stand By Me”.
The tunes were provided by the Hawkes. Some of the largest crowds were in front of the stage dancing and swinging to the music.As usual when Center Street closes, a good time was had by all. Make sure and come out next year!
I recently received an article that I wanted to share. Insurance in Charleston is difficult to manage unless you have the help of a great agent. Charleston insurance and coastal insurance will be a topic of conversation for some time to come. Here is some advice given to me by my State Farm insurance agent, Paula Hampton.
Understanding the value of your home
How to determine your homeowners coverage
Your home may be the biggest investment you’ll ever make. So if you are serious about protecting that investment, here is some important information to consider when determining the coverage amount for your home.
Make sure that your home is insured for at least 100% of its estimated replacement cost
To determine your amount of homeowners coverage:
- Get an estimate of the replacement cost of your home
- Select the coverage amount that best fits your needs
We recommend that you purchase an amount of coverage at least equal to the estimated replacement cost. But the choice is yours. Determining your home’s estimated replacement cost is important because this will ultimately determine which policy options are available to you. Since it is impossible to predict today what the cost will be to replace your home in the future, it’s important to have enough coverage to account for unforeseen circumstances.
Understand the difference between market value and replacement cost
Market value is the amount a buyer would pay for a home, including the land, regardless of how much it would cost to rebuild the home. Replacement cost for this purpose is the rebuilding cost necessary to repair or replace the entire home.
Replacement cost IS NOT:
- The market value of the home
- The home’s purchase price or the cost of the land
- The outstanding amount of any mortgage loan
When buying a new home, be sure to obtain a replacement cost estimate
Before you purchase a new home, make sure that you determine the appropriate amount of coverage needed. Here’s how:
- Ask if a replacement cost estimate is available when you have the home appraised
- Or, consult with your local builder association or a reputable builder for an estimate
- You can also check with your insurance agent to help you with this process
Be aware of any architectural details or unique building materials that may affect your estimated replacement cost, such as:
- Upgraded bathrooms or kitchens (including cabinets)
- Finished or partially finished basement
- Additional rooms or living space
- Custom molding or arched windows
- Other unique features
A contractor or appraiser can help estimate your home’s replacement cost
Building contractors or professional replacement cost appraisers are a good source for obtaining an estimated replacement cost for your home. Estimates from these sources should reflect your home’s features, like those mentioned above. If you are unable to obtain a detailed estimate from these sources, your insurance agent can discuss other options for estimating the replacement cost of your home.
Review your policy annually to make sure that your coverage meets your needs
Have you recently remodeled or improved your home?
When you upgrade or improve your home, you may increase your home’s estimated replacement cost. Your agent will then help you adjust your policy to meet your coverage needs. Check your policy’s provisions for notification requirements of any remodeling or additions that increase your home’s value.
Has the rate of inflation risen since your last appraisal?
Many policies provide coverage that automatically adjusts every year in an effort to compensate for increases in construction costs for your area. However, certain conditions such as severe weather can increase the demand for labor and materials, and raise costs beyond normal inflation. It is important to update your coverage amount each year to keep up with the changing economy.
What influences building costs in your area?
Market conditions in your area may impact the amount it will cost to rebuild your home if you experience a loss. Replacement cost estimates are influenced by supply of labor, demand for labor, and the cost of construction materials. Keeping up with the current market conditions in your area and changing your coverage amount accordingly, will help you maintain coverage at least equal to 100 percent of the estimated replacement cost coverage for your home.