What is a 1031 Exchange?

There are many complex rules governing 1031 exchanges, but one of the most important rules is easy to remember: “If you take the cash, you pay the taxes,” said Craig Brown, a vice president of IPX1031 Exchange, which specializes in exchange transactions.2008 REALTORS® Conference & Expo in Orlando officially kicks off on Friday, Nov. 7 and runs through Monday, Nov. 10.

He instructed a preconference course in Orlando on 1031 Exchanges. The

If a seller exchanges one like-kind investment property for another, and the transaction results in any cash for the seller, that amount is taxable—even if the seller is taking on additional mortgage debt.

“Debt does not offset cash,” said Brown, who is based in Dallas.

Capital Gains Concerns

If your client expects to see cash from a 1031 exchange, it may be better to initiate the transaction in 2008, when the capital gains tax rate is only 15 percent, he said.

“You can’t predict what will happen next year to the capital gain rate, but many of my clients are concerned Congress will increase it next year, and they want to take advantage of the current rate,” Brown said.

If an exchange isn’t completed until 2009, the investor may choose to pay taxes on the gain in either 2008 or 2009 under IRS installment sales rules.

What Qualifies as a 1031?

To qualify for a 1031 exchange, a property must meet four basic rules:

1. Be held for an investment or used for productive purposes in a business.
2. Be exchanged with a like-kind property (any other type of real estate).
3. Investor must identify replacement properties for the one being exchanged within 45 days.
4. Exchange transaction must be completed within 180 days.

While it’s not possible to exchange a principal residence, a recent court ruling has clarified rules that make it possible to exchange a second home or a vacation home, Brown said.

The property must meet these requirements: The owner has held the property for at least two years; rented the property for at least 14 days per year at fair market value; and used the property personally for no more than 14 days of each year.

Dream House Rules

The same ruling spelled out circumstances under which owners could defer taxes when exchanging any type of investment property for a “dream house,” that they will eventually live in full-time.

First, the investor must rent out the dream home for 14 days a year for at least two years, and use it for no more than 14 days per year. At the end of the two-year span, the home could be converted to a principle residence for the owner’s use.

The two-day session on 1031 exchanges was presented by the REALTORS® Land Institute. For more information, visit http://www.riland.com

—Mariwyn Evans

A Day in the Life of a Sea Glass Real Estate Agent!

Jennie cleaning the window at Villa Time Out so she can get the perfect shot!

Just another day in the life of a Sea Glass real estate agent!  Jennie Rosenberg, part of the Sea Glass Properties team, is cleaning the windows at Villa Time Out located in Chocolate Hole on St. John, US Virgin Islands, so she can get perfect photos for her off-island customers.  You can be assured that the team at Sea Glass Properties will always go the extra mile for you, whether you’re buying or selling, Sea Glass Properties is the real estate firm you can trust! 

For more information about buying or selling property in the US Virgin Islands, feel free to contact Jennie@seaglassproperties.com, or take at look at our present offerings at www.seaglassproperties.com.

A day in the life of a Sea Glass Real Estate Agent

This is Sea Glass Properties real estate agent Jennie Rosenberg at Estate Stonegate located on the North side of St. Thomas, USVI, working hard for her client at the open house for this truly one of a kind Caribbean home.  Stonegate is situated on over three gated acres with amazing down island views that are guaranteed to provide amazing sunrises and sunsets.  Estate Stonegate is currently offered for sale and short term rental.  If you’d like more information on this property, please go to www.seaglassproperties.com, or contact me at jennie@seaglassproperties.com.

Living in Luxury Just Became More Attainable!

Do you dream of waking up and having your yacht docked outside your back door in the crystal blue waters of the Caribbean?  Then the Residences at Yacht Haven Grande are the answer.  Call us to learn about the new pricing structure on the twelve luxury Residences at Yacht Haven Grande at St. Thomas, USVI.  For more information, please contact info@seaglassproperties.com or www.seaglassproperties.com.  For more information about this exciting property go to, http://www.yachthavengrande.com/index.php?sv_path=4504.  There are also opportunites to berth your yacht, inquire within.

Preserve at Botany Bay Announces New Partnership

 

Located in a dramatic setting where the Caribbean Sea meets the Atlantic Ocean, Timbers Company, in a joint venture with Jumeirah, is developing Jumeirah at Botany Bay, a lush 367-acre multi-use resort that encompasses the entire western tip of St. Thomas. Now available to the public for the first time in 80 years, the property is the newest real estate development in the U.S. Virgin Islands. Jumeirah at Botany Bay currently offers homesites that provide both commanding ocean views and easy beach access to two, intimate beach coves. Property owners will enjoy home ownership in an intimate setting while having at their fingertips the amenities and services of the finest hotels. Jumeirah at Botany Bay will also have hilltop villas; hillside lots; a residence club; and a five-star boutique hotel complete with a beach club, two-story waterfront spa, fine and casual dining. Previously owned by The Corning Family as their private estate, Jumeirah at Botany Bay is now available to owners seeking a relaxed and intimate home or retreat. The property’s ideal location provides easy access clear blue water, a pristine coral reef with rare staghorn coral and nature conservancy. In addition, the western location of the property means that it boasts many of the most spectacular views of the St. Thomas sunsets. With water temperatures averaging 85 degrees and gentle trade winds resulting in a comfortable tropical climate ranging from 72 to 88 degrees, St. Thomas is the perfect island getaway. Jumeirah at Botany Bay is located only 15 minutes from the airport on St. Thomas, the most accessible of the Caribbean islands, with many direct flights from the U.S. mainland. This unique combination means that Jumeirah at Botany Bay will offer guests and owners the most conveniently accessible retreat in the Caribbean. “We are honored to be given this unprecedented opportunity to develop a luxury resort in Botany Bay’s truly pristine location,” says David Burden, Timbers Company founder. “At the same time, we will work to respect and preserve the property’s natural environment and beauty for many years to come.”   Jumeirah at Botany Bay offers guests numerous real estate options such as whole ownership, fractional ownership or a boutique hotel experience that include:

Estate Lots  

 

 

 

Owners can build their dream homes on one of the 31 remaining estate lots that are currently available ranging from $975,000 to $4 million and range in size from two to 14 acres of lush tropical foliage. Each lot has an unobstructed view of the Atlantic Ocean or the Caribbean Sea. To complement Estate Lot ownership, owners will also enjoy all the services and amenities of the proposed five-star boutique resort. Hilltop Villas Located on a knoll with expansive views of the Caribbean Sea and the Atlantic Ocean, the Hilltop Villas will be comprised of 20 elegant duplexes, housing a mixture of 40 two-story, three-and-four-bedroom homes, each with a private splash pool and patio. The anticipated release date of these villas is the fall of 2006. Hillside Lots Situated on one to two acres, 25 hillside lots are at the pinnacle of the property and boast dramatic, 360-degree views of the entire preserve. Release is scheduled to begin in the summer of 2007. Private Residence Club The planned Residences at Juneirah at Botany Bay will feature four-bedroom residences with approximately 3600 square feet of luxurious living space. Each of the spacious and exquisitely furnished villas will overlook sparkling turquoise waters and a dazzling white sand beach. In addition, each residence will have its own private splash pool. The Residences at Jumeriah at Botany Bay are being designed and are subject to approval. Boutique Hotel At the heart of Jumerirah at Botany Bay will be the planned intimate and secluded 84-room boutique hotel composed of nine graceful buildings and featuring 48 spacious one-bedroom suites and 18 two-bedroom suites created to reflect the relaxed Caribbean lifestyle. All the suites will be nestled into the hillside with dramatic views of the ocean and easy access to all amenities and beaches. The hotel will feature fine and casual restaurants that open to terraces, a two-story boutique spa, and exceptional levels of personalized service. Five Star Amenities

All guests at Jumeirah at Botany Bay will enjoy a wealth of luxury services and amenities. The Beach Club will be a natural place for members, owners and guests to gather. Here, guests can relax around the service-oriented 8,000 square foot infinity-edge pool tucked against the water’s edge of Botany Bay or the neighboring lap pool. A casual bar and grill will serve poolside favorites. The waterfront spa will offer a wide variety of pampering, restorative and wellness treatments and fitness conditioning. An oceanfront fitness center with state-of-the-art equipment and a Pilates and Yoga room will also be available to guests and owners, as well as a concierge.

For additional information about ownership at this state of the art development and to arrange a site tour, please contact jennie@seaglassproperties.com or www.seaglassproperties.com.