Posts

Listen to Learn

I had a very trying week, and yet I’m glad it was. The problems that arose helped teach me that I still have some work to do on my listening skills. I’m betting that you might too, so I’m sharing. Building and selling Real Estate for the most part is pretty rewarding. Everyday the team at my company interacts with clients who use our tools to be more productive. The goal is to maximize the technology so folks can either make more money or save time. So it’s really rewarding for us. Now that doesn’t mean that it’s always a ball of fun anymore than your work is, but for the most part what we do is really rewarding. And when things get troubling or difficult, I try to step back and find the cause. Not always easy. And while I hate to admit it, problems arise most often because of poor communication. Communication can be internal or customer facing, it doesn’t matter, the outcome is the same – someone’s upset or at minimum, not delighted.
I didn’t tell you anything new did I? Communication has always been hard and it’s getting harder because printed words – emails and texts, aren’t very conveying. Come on, can you really tell my mood right now? Of course not. So I’ve laid out a problem or issue. So how do we make progress towards something different? How do we improve communication? Simplistically we know the answer. Listen more and speak less. Easy to say. Hard to do. I have an idea. How about we all act like 3 or 4-year olds and ask question, after question, after question? That way we put ourselves in a position where we can actually spend more time listening and less time talking. And guess what? It’s almost impossible to ask questions via email. It’s too tedious – all that Send/Receive, Send/Receive, Send/Receive!
Here’s the catch. You have to really be curious and want to know the answers. You have to really want to hear the other person’s answer or point of view. You can’t be contrite. And while you may be reading this thinking that I’m talking about the people we work and interact with frequently, it’s just as valuable or even most valuable to have conversations with your customers. The satisfied ones are full of advice and knowledge they can share and the unhappy ones can give you direction.
Today I often hear that people don’t want to call or stop in to see someone, because they feel they are being intrusive. A “pre-email” or text is thought of as polite; maybe. But if what you want to learn holds value for all parties, I find a call or in-person meeting is welcome. Problem is people on the calling side are many times acting in a self-serving way. Bad, very bad. I talk to a lot of people about communication and connections. I’ve learned so much. It takes a lot of practice. It isn’t always easy for sure. I’m convinced we can do better. We can be “connected” AND benefit from the amazing tools we have to share and connect. Remember the ice bucket challenge? How about we come up with a challenge for people to listen more than they speak? I have no idea what that might look like as a “game” or “challenge,” and I’m hoping all you smart folks might. I ask you. Am I off base? Is communication just fine? I’m anxious to listen. You can even call me if you like. 602-688-9379. Oh my! How novel. I ANSWER my phone.
Happy 1031? IPX1031


NO TRICK: A Treat for Unsuccessful 1031 Exchanges!

A treat from the IRS? Taxpayers should not be spooked if they are unable to complete their 1031 Exchanges. A treat may exist for a calendar-year taxpayer who initiates a 1031 tax-deferred exchange during the last few months of this year only to find that the exchange fails (they are unable to purchase new replacement property within the time periods set forth in Section 1031). Since the exchange period will go into 2018, the IRS provides an option called “tax straddling” which allows most taxpayers to pay the tax that is due on their 2018 return as opposed to their 2017 return.

Of course the major benefit for a taxpayer who successfully completes a 1031 Exchange is 100% deferral of taxes and the ability to invest all of their equity into new property. Unfortunately, if a taxpayer is not able to purchase new property to successfully complete the 1031 Exchange, the taxes associated with the sale of their investment property will be due. However due to “tax straddling” the taxpayer may receive a one year tax payment deferral thanks to the coordination between IRC §453 and §1031 provided in the §1031 regulations.

How does this work? If a delayed 1031 exchange begins in the latter portion of 2017, the exchange period may run into 2018. If the exchange fails or if the taxpayer (having a bona fide intent to do an exchange) receives cash boot in 2018, the 1031 regulations treat the exchange as an installment sale allowing the taxpayer to consider that the exchange proceeds were received (and are taxable) in 2018.

However, if a taxpayer prefers to pay their taxes as soon as possible, in accordance with IRC section 453 (d) a taxpayer may “elect out” of the installment method. By electing out, the taxpayer can recognize the gain in 2017 instead of 2018. To elect out, the sale should be reported on Form 8949, Form 4797 (or both) and not on Form 6252. The election must be made by the due date, including extensions, for filing the 2017 tax return. For more information about the procedure and forms to use, see IRS Publication 537 and consult with your tax advisor. Additionally, tax straddling does not apply to all sales and any gain attributed to debt relief will have to be recognized in the year of sale.

The IRS does not penalize investors for attempting to complete a 1031 Exchange. Tax straddling provides an added incentive to taxpayers selling investment property at the end of the year. Why not attempt to complete a 1031 Exchange when a one year payment deferral is available as the back-up plan?

Please call us at IPX1031 to discuss tax straddling and other valuable tax-deferral solutions. Be sure to consult with your tax advisor before participating in a 1031 exchange.

Events

Nothing Found

Sorry, no posts matched your criteria

Portfolio Items