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1031 Exchanges and Tax Deferrals

With tax season upon us, we found the following excerpt from Wyoming Title and Escrow timely, informative and easy to follow. It can be difficult to stay on top of the latest practices, especially when it comes to real estate. Please contact us if you are interested in learning more about a 1031 Exchange.

“A 92 Year-Old Solution for Real Estate Investors Facing Higher Taxes in 2013:

1031 Exchanges Offer Full Deferral of the New 3.8% Medicare Surtax Tax and 20% Capital Gain Tax

The familiar adage, “It’s not how much you make, but how much you keep” rings truer than ever for real estate investors in 2013. Not only have capital gain taxes increased significantly for high earners, but many investors below the top tax bracket face an additional 3.8% surtax on passive investment income like capital gains. Fortunately, IRC Section 1031, a provision which has been in the tax code since 1921, provides critically needed tax relief.

Under the American Taxpayer Relief Act of 2012, the top capital gain tax rate has been permanently increased to 20% (up from 15%) for single filers with incomes above $400,000 and married couples filing jointly with incomes exceeding $450,000. In addition, the new IRC Section 1411 3.8% Medicare surtax on net investment income, which includes capital gains, results in an overall rate for higher-income taxpayers of 23.8% — a staggering 58% increase from 2012 tax rates!

Four Steps Involved in Determining Capital Gain Taxation

Absent the tax deferral benefits of a 1031 exchange, below is a summary of the four ways investors will be taxed on the sale of an investment property:

1) Depreciation Recapture: Taxpayers will be taxed at a rate of 25% on all depreciation recapture.

2) Federal Capital Gain Taxes: Investors owe Federal capital gain taxes on the remaining economic gain depending upon their taxable income. Since a new higher capital gain tax rate of 20% has been added to the tax code, investors exceeding the $400,000 taxable income threshold for single filers and married couples filing jointly with over $450,000 in taxable income will be subject to the new higher tax rate. The previous Federal capital gain tax rate of 15% remains for investors below these threshold income amounts.

3) New Medicare Surtax Pursuant to IRC Section 1411: The Health Care and Education Reconciliation Act of 2010 added a new 3.8% Medicare Surtax on “net investment income.” This 3.8% Medicare surtax applies to taxpayers with “net investment income” who exceed threshold income amounts of $200,000 for single filers and $250,000 for married couples filing jointly. Pursuant to IRC Section 1411, “net investment income” includes interest, dividends, capital gains, retirement income and income from partnerships (as well as other forms of “unearned income”).

4) State Taxes: Taxpayers must also take into account the applicable state tax, if any, to determine their total tax owed. Some states have no state taxes at all, while other states, like California, have a 13.3% top tax rate.”

Affordable Retirement Get-away? Still Want to See the Teton’s?

Quality Development in Teton Valley, Idaho

Entry sign to Spring Hollow Ranch

 SPRING HOLLOW RANCH – TETONIA, IDAHO

Christy and I are proud to be able to offer an outstanding vacant land opportunity just over the hill from Jackson Hole, Wyoming in the lovely Teton Valley of Idaho.  Spring Hollow Ranch is a 50 lot development in the north end of the Teton Valley of Idaho offering outstanding views of the Tetons, high quality ammenties, strong ownership and very affordable pricing.

Lot sizes vary from 6 acres to over 30 acres in size.  All but 6 lots have full Teton views and all of the lots have access to the most beautiful recreational space available in the Teton Valley.  A private trail sysytem links both phases of development and offers the opportunity for miles of hiking, bike riding, horseback riding and cross country skiing.  34 acres of the open space includes a spring fed pond that attracts wildlife to the property.

For more information on Spring Hollow Ranch please feel free to contact Garth Gillespie at Jackson Hole – Sotheby’s International Realty at 307-739-8056 or 307-413-5243.

Economic Stimulus Act – How does it effect Jackson Hole??

The Economic Stimulus Act of 2008 signed into law by President Bush in Feb. provides help for some homeowners facing a more challenging lending environment.  The act contains provisions to increase the availability and affordability this year for the kinds of loans that finance many Jackson Hole area homes. 

The act provides a good opportunity for homeowners who purchased homes in the Jackson or Teton Valley of Idaho area during the past 3-5 years and used an adjustable rate mortgage to fund the purchase.  Between March 1 through December 31 new jumbo-conforming loan limits apply.  The economic stimulus package temporarily increased the limit on mortgages that can be purchased by the government-sponsored Freddie Mac and Frannie Mae.  The Office of Housing and Urban Development, Freddie Mac and Frannie Mae have designated Teton County, Wyoming, and Teton County, Idaho, as among certain high-value areas of the country where  a higher loan limit will be necessary to be coupled with a lower conforming rate.  The traditional loan amount is still $417,000 but the jumbo conforming loan limit is now $693,750.

The new rules only apply to 30-year fixed rate and five year adjustable mortgages.

For more information on the new mortgage rates feel free to touch base with Taylor Mortgage, John Curry at 307-733-5800 or T.R. Pierce at the Bank of Jackson Hole 307-733-8064.  They’d be happy to assist you.  If you are interested in real estate information please feel free to call Garth Gillespie 307-413-5243 or email me.

New Listing in Jackson Hole!

 

Comfortable, Well Maintained Rafter J Home.

Charming 3 bedroom, 2 bathroom home includes a gas fireplace, an open floor plan, a large well maintained fenced yard and a 2 car garage. Good mountain views in all directions and the opportunity for remodeling and or expansion provides the homeowner many possibilities. Rafter J offers good walking paths, views of the Tetons and a peaceful neighborhood location.

The home is about 1,500 square feet and includes washer and dryer, refrigerator, stove/oven and a dishwasher.  Room spaces are perfect with a large open floor plan in the kitchen, living and dining room.  Summer outdoor life is fantastic with a large lawn in the back yard – perfect for horseshoes, soccer, free roaming dog etc

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Please call Garth Gillespie at 307-739-8056 or email me if you have additional questions or would like to tour the home.

Flying to Jackson Hole this Summer?

Just Announced — Summer Flight Schedule for Summer 2008 – Jackson Hole.

Time to book your summer vacation to the most beautiful place in the lower 48! 

Summer 2008 Airline Schedule
Inbound Non-Stop Jet Service
City Airline Plane Departs Arrives Frequency Start Date End Date
Atlanta Delta 757 10:15AM 12:37PM Thurs – Sun 6/5/2008 8/31/2008
Chicago United A319 12:00N 2:05PM Daily 6/5/2008 9/1/2008
Chicago United 752 3:00PM 5:02PM Daily 5/30/2008 6/4/2008
Chicago United A319 5:05PM 7:14PM Daily 6/5/2008 9/30/2008
Chicago American 757 9:30AM 11:45AM Sat – Sun 7/5/2008 8/31/2008
Dallas/Fort Worth American 757 5:10PM 7:06PM Sat 6/14/2008 8/30/2008
Dallas/Fort Worth American 757 9:50AM 11:30AM Daily 6/12/2008 9/30/2008
Denver United A319 1:20PM 2:44PM Sat – Sun 9/6/2008 9/28/2008
Denver United Express DH2 1:25PM 3:24PM Daily 9/2/2008 11/30/2008
Denver United A319 1:30PM 2:51PM SAT 5/10/2008 8/30/2008
Denver United Express DH2 1:50PM 3:49PM Daily 4/7/2008 5/19/2008
               
               
Denver United Express DH2 10:10AM 12:14PM Daily 4/7/2008 5/2/2008
Denver United Express DH2 10:25AM 12:34PM Daily 10/26/2008 11/30/2008
Denver United A319 11:15AM 12:39PM Daily 5/3/2008 6/4/2008
Denver United 752 11:15AM 12:34PM Daily 6/5/2008 10/25/2008
Denver Frontier   2:20PM 4:00PM Daily 5/15/2008 11/30/2008
Denver United A319 2:25PM 3:45PM Daily 5/20/2008 9/1/2008
Denver United A319 3:25PM 4:46PM Sun 6/15/2008 8/31/2008
Denver United Express DH2 4:07PM 6:00PM Daily 6/5/2008 9/1/2008
Denver Frontier   4:55PM 6:35PM Daily 5/15/2008 11/30/2008
Denver United A319 5:30PM 6:51 AM SAT 6/21/2008 8/30/008
Denver United 752 7:55PM 9:15PM Daily 5/20/2008 9/30/2008
Denver United A319 8:10AM 9:38AM Daily 6/5/2008 9/1/2008
Denver United Express DH2 8:25AM 10:21AM Daily 9/2/2008 11/30/2008
Denver Frontier   8:30AM 10:10AM Daily 5/15/2008 11/30/2008
Denver United Express DH2 8:40PM 10:50PM Daily 10/1/2008 11/30/2008
Denver United Express DH2 8:50PM 10:49PM Daily 4/6/2008 6/4/2008
Minneapolis Northwest A319 4:50PM 6:22pm Daily 6/6/2008 9/29/2008
Salt Lake City Delta Connection CR7 1:40PM 2:40PM Sun – Fri 4/9/2008 6/4/2008
Salt Lake City Delta Connection CR7 11:00AM 12:08PM Daily 4/8/2008 11/30/2008
Salt Lake City Delta Connection CR7 2:55PM 3:55PM Daily 6/5/2008 11/30/2008
Salt Lake City Delta Connection CR7 4:55PM 5:57PM Daily 4/8/2008 11/30/2008
Salt Lake City Delta Connection CR7 7:30PM 8:32PM Daily 6/5/2008 11/30/2008
Salt Lake City Delta Connection CR7 7:45PM 8:47PM Daily 4/1/2008 6/4/2008
Salt Lake City Delta Connection CR7 9:55AM 11:03AM Daily 6/5/2008 11/30/2008
         
Outbound Non-Stop Jet Service
City Airline Plane Departs Arrives Frequency Start Date End Date
Atlanta Delta 757 1:35PM 7:05PM Thurs – Sun 6/5/2008 8/31/2008
Chicago American 757 12:18PM 4:00PM Sat – Sun 7/5/2008 8/31/2008
Chicago United A319 7:45AM 11:28AM Daily 5/31/2008 9/30/2008
Dallas/Fort Worth American 757 12:25PM 3:50PM Daily 6/12/2008 9/30/2008
Dallas/Fort Worth American 757 8:03AM 11:40AM Sat 6/14/2008 8/30/2008
Denver United A319 1:20PM 2:42PM Daily 5/3/2008 6/4/2008
Denver United 752 1:20PM 2:44PM Daily 6/5/2008 10/25/2008
Denver United A319 10:18AM 11:44AM Daily 6/5/2008 9/1/2008
Denver Frontier DH4 10:40AM 12:22PM Daily 5/15/2008 11/30/2008
Denver United Express DH2 10:40AM 12:31PM Daily 9/2/2008 11/30/2008
Denver United Express DH2 12:35PM 2:30PM Daily 4/7/2008 5/2/2008
Denver United Express DH2 12:54PM 2:45PM Daily 10/26/2008 11/30/2008
Denver United A319 3:24PM 4:44PM Sat – Sun 9/6/2008 9/28/2008
Denver United A319 3:25PM 4:50PM Sat 5/10/2008 8/30/2008
Denver United Express DH2 3:44PM 5:40PM Daily 9/2/2008 11/30/2008
Denver United Express DH2 4:10PM 6:05PM Daily 4/7/2008 5/19/2008
Denver Frontier DH4 4:30PM 6:12PM Daily 5/15/2008 11/30/2008
Denver United A319 4:30PM 5:55PM Daily 5/20/2008 9/1/2008
Denver United A319 5:28PM 6:53PM Sun 6/15/2008 8/31/2008
Denver United Express DH2 6:20PM 8:18PM Daily 6/5/2008 9/1/2008
Denver United 752 7:00AM 8:18AM Daily 5/20/2008 9/30/2008
Denver United Express DH2 7:00AM 9:04AM Daily 10/1/2008 11/30/2008
Denver Frontier DH4 7:05PM 8:47PM Daily 5/15/2008 12/17/2008
Denver United Express DH2 7:25AM 9:20AM Daily 4/6/2008 6/4/2008
Denver United A319 7:50AM 9:08AM Sat 6/21/2008 8/30/2008
Minneapolis Northwest A319 9:00AM 12:10PM Daily 6/6/2008 9/29/2008
Salt Lake City Delta Connection CR7 1:15PM 2:10PM Daily 4/8/2008 11/30/2008
Salt Lake City Delta Connection CR7 11:55AM 12:50PM Daily 6/5/2008 11/30/2008
Salt Lake City Delta Connection CR7 3:15PM 4:11PM Sun – Fri 4/9/2008 6/4/2008
Salt Lake City Delta Connection CR7 5:05PM 6:01PM Daily 6/5/2008 11/30/2008
Salt Lake City Delta Connection CR7 7:00AM 8:04AM Daily 4/8/2008 11/30/2008
Salt Lake City Delta Connection CR7 8:10AM 9:14AM Daily 4/8/2008 11/30/2008
           
           
           
Inbound Commuter Service
Denver United Express Dash 8 1:20 PM 3:19 PM Daily Year Round    
Denver United Express Dash 8   Daily 10/28/2007 12/14/2007
Outbound Commuter Service
Denver United Express Dash 8 3:49 PM 5:50 PM Daily Year Round    
Denver United Express Dash 8   Daily Year Round  

This schedule was updated March 8, 2008; flight times are likely to change, and will vary throughout the summer.

 

 

For more information on Jackson Hole and Jackson Hole Real Estate please visit www.JacksonHoleExperts.com or give Garth Gillespie a call at 877-739-8056.

 

Sotheby’s International Realty — 61.8% Market Share!

 

2007 was a record year for the Jackson Hole real estate market, and even better one for Sotheby’s International Realty Jackson Hole Brokerage, which increased its local market share to 61.8% based on its sales volume contrasted against Teton County total sales as reported by the Teton County Assessor’s office.

Looking at the market as a whole, the total dollar volume of sales reported through the Teton Board of Realtors Multiple Listing Service (MLS) in 2007 rose 9.1% over 2006.  Even in the fourth quarter, a rocky period for the national real estate market, sale volume was up 5.6% over the same period in 2006.  Sotheby’s sales associates outpaced their competitors for the year, boosting the MLS sales volume in 2007 by 12.2%.  Based on the Teton County Assessor’s numbers, which include both MLS and non-MLS transactions, Sotheby’s associates handled 61.8% of the $1.055 billion real estate sales volume in the Jackson Hole region.  The company’s average market share for the past five years is now 58.2%.

As the result of agent’s efforts and enhanced support they receive, listings with Sotheby’s International Realty in 2007 resulted in an in-house sale nearly 60% of the time.  This was more than 50% better than the company’s nearest competitor – Real Estate of Jackson Hole.  Sotheby’s agents do 88% more transaction sides per agent and 83% more dollar volume than their closest competitor.

This story was written by Sotheby’s International Realty Jackson Hole Brokerage with contributions and editting by Garth Gillespie, sales associate. 

For more information on these statistics or if you have any questions about the Jackson Hole Market please feel free to visit JacksonHoleExperts or to call me at 307-413-5243.