In order to qualify as a REIT for any taxable year, at least 95% of a REIT’s gross income must be derived from sources such as dividends, interest, and 75% of income from items related to certain real property. The items of income related to real estate assets are listed under IRC §856(c)(3) which includes, among other sources, rents from real property, interest on obligations secured by real property or on interests in real property, gain from the sale or other disposition of real property that is not inventory or dealer property, and dividends and gains from the sale or orther disposition of shares in other qualifying REITs. For the purpose of the income tests described above, IRC § 856(d)(1) provides that the term rents from real property includes “rents from interests in real property, charges for services customarily furnished or rendered in connection with the rental of real property, whether or not such charges are separately stated, and rent attributable to personal property which is leased under, or in connection with, a lease of real property, but only if the rent attributable to such personal property for the taxable year does not exceed 15 percent of the total rent for the taxable year attributable to both the real and personal property leased under, or in connection with, such lease”. To provide guidance with regard to tiered partnerships, the Treasury prescribed Reg. § 1.856-3(g) which states that a REIT is permitted to look through a partnership in which it is a partner for the purposes of applying the income tests of IRC § 856(c)(2) and IRC § 856(c)(3). This regulation section provides that a REIT is deemed to own a proportionate share of each of the assets of the partnership and that it is deemed to be ent... ... middle of paper ... ...hall be issued to provide that certain items of gross income will not be taken into account in determining income or loss from any activity. The court could not justify treating IRC §469(l)(1) as self-executing and IRC §469(l)(2) as not being self-executing. The court stated that there was intent to promulgate regulations to carry out a statutory purpose and the fact that regulations are not forthcoming cannot be an acceptable basis to preclude taxpayer from congressionally intended and appropriate relief. In addition, the court emphasized that Hillman’s approach in netting his share of self-charged management fee expense with gross income from the activities fulfills the economic significance concern. The taxpayer did not experience accretion in wealth. The court did not see an economic difference between this situation and one involving self-charged lending.
If the partners did comply, their return on investment was guaranteed. These actions were interpreted by the courts as offers of payment to induce referrals of program related business based on volume of referrals which is
The chart above paints a solid picture of the five-number summary, mean, mode, range, and standard deviation for the 40-gulf view condominiums sampled for our analysis. When looking at our analysis of golf view condominiums we can see that a large price range exists with one unit selling for $189,000 on the low end and another selling for $935,100 on the high end with an average selling price of $606,590. Gulf view condominiums have a range of 276 days on the market with units selling in as little as 22 days and others taking as long 298 days. According to the Interquartile Range Rule for...
Special rules and new floor procedures have been institutionalized. Although the external political environment of the House is as electrifying as that of the Senate, it is based on a very different body of basic rules. The individualist Senate, a body in which senators aggressively exploited the great Congressional privileges these rules gave them, as she argues, to further their own individual ends. In fact, nowadays, the process of lawmaking in a chamber with non-majoritarian rules and with members so accustomed to exploiting those rules fully is reasonably expected to drag on for months, if not
Suburbs: Protected Markets and Enclave Business Development.” Journal of the American Planning Association Winter 1999: 50-61.
Although the recent tech boom in San Francisco has been blamed for the increased housing demand and the lack of affordable rental housing in the City, the reality is that the shortage of affordable rental housing been steadily climbing for the last 35 years. Rent control is oftenat the center of the controversy regarding the affordable housing shortage. In response to high inflation, and escalating rents, San Francisco’s Residential Rent Stabilization and Arbitration Ordinance was passed in 1979 (Forbes, Sheridan, 1999). Rent control imposes restrictions on landlords in regards to rent increases and evictions. It is estimated that seventy percent of San Francisco’s rental units are under rent control (Marti, Shortt, 2013). Because of the limited rent increases allowed, tenants living in these rent controlled apartments seldom move out, which severely impacts the vacancy rates in the City. Although the vacancy rate among rent-controlled units is extremely low, there are occasions when a tenant may vacate a rent control unit (a job out of the area, the decision to purchase a home, etc.). When a rent-controlled unit is voluntarily vacated, the landlord is allowed to raise the rent to market rates (this is called vacancy de-control); then the rent control annual increase takes effect on the new rent. A landlord will often raise the new rent to the highest possible price the market will allow, in an attempt to recoup the financial loss he is incurring on the units still under rent control. Because of the new higher rent, the previously affordable unit is no longer considered affordable; which then impacts the inventory of affordable housing in San Francisco.
If it does not qualified as an investment property, what can Mr. and Mrs. Ricardo do to meet for the rule for §1031?
To understand what is being discussed, one has to understand the underlying problem: rent control, as a result of a shortage of affordable housing. Rent control is defined as “a law placing a maximum price, or a “rent ceiling,” on what landlords may charge tenants” (Block, W. n.d) and is the “stated goal of preserving affordable housing for low- and middle-income families” (Blackwell, L. n.d). Rent control changes depending on the country. In this essay the effects of rent control will be discussed.
Overall, they argue that the goals of rent control can be reached if they are
This paper is written to provide a reasonably comprehensive overview of Section 1031 of the IRC as it pertains to real estate transactions, and to offer some thoughts on the wealth-creation advantages that 1031 Exchanges offer.
Stankee, "IRS Concedes That Concessionaire Profits Were Not Subpart F Income," 11 /. of InVl Tax'n (Mar. 2000). See also General Explanation of the Tax Reform Act of 1986, fn. 22 above, at p. 829, concluding that even though Sec.863(c) excludes from transportation income salaries of airline employees earned on flights between U.S. airports and foreign country airports, income attributable to services performed in the United States or in the U.S. territorial waters is U.S.-source
It is important to clarify some key assumptions that were made in valuing the properties to this NPV. First, the project yields a high IRR of 73 %, due largely in part to the sale of each building upon lease up. For the cash flow projections, it was assumed that all buildings are sold 18 months after construction completion. Therefore, with the exception of the last building to be sold, Heron Quay, the buildings are sold toward the end of their free-rent periods and no rent is collected.
Ethics, according to the Oxford dictionary is “a set of moral principles that govern a person’s behavior or the conducting of an activity”. Ethics consists of doing what the law requires, following the standards of behavior our society accepts, and also has to do with what you believe is right or wrong. Rent control is not unethical, but is very controversial. If on one hand it is a good thing because it prevent landlord from being unethical charging the tenants unfair rent price, on the other hand it is unfair for the landlords to be imposed a rental price below market price which he/she is morally entitle to. Rent control can create several problems not only for the landlord but for the economy as well.
Buying a home acts as the best choice over renting because it saves money overall and homeowners face less restrictions than renters. Owning a home is almost a sense of freedom. There are no restrictions, there are no landlords, and there are no rules. Buying a home is more expensive than renting at first, but it saves money. Renting a home has risks like expensive monthly payments, restrictions on what a tenant can and cannot do, and the landlord can even evict the tenant if they feel it is necessary.
With landlords more willing to offer higher regear incentives tenants are being receptive to offers. Since 2007 tenants have been placing more of a priority on cash generation/cost savings and this has helped to counter tenant’s existing arguments against regears such as the difficulty of identifying their core estate and therefore the need to maintain flexibility.
The Act however did not sort all the problems either because, as Goff J put it in BP v. Hunt (1979) ( in relation to s.1(3)), its focus was upon the prevention of unjust enrichment and consequently it does not address itself to the recovery of reliance losses which don't result in a benefit to the other party, nor does it seek to apportion the losses between the parties.