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Palos Verdes & South Bay Real Estate Blog

By George Fotion | Broker in Palos Verdes Estates,...
  • Palos Verdes foreclosures - where are they?

    Posted Under: Home Buying in Palos Verdes Estates, Foreclosure in Palos Verdes Estates, Investment Properties in Palos Verdes Estates  |  August 16, 2013 11:03 PM  |  685 views  |  No comments

    Palos Verdes foreclosures palos verdes foreclosures

    Not a week goes by when a client asks me about Palos Verdes foreclosures or foreclosures somewhere in the South Bay and Beach cities. The fact of the matter is that they don't exist ... ok, that's not quite true, but in all practical purposes they don't. At least the Palos Verdes foreclosures that are in the category that I'm asked about. That category is the group of homes that in foreclosure but are not listed. I've written about this in this article about Palos Verdes foreclosures.

    The article discusses the three stages in the foreclosure process but more importantly in which stage rests the best odds for getting a deal on any of the Palos Verdes foreclosures that exist at any point in time But here's the problem, it is exceedingly rare to find that any of these homes go to auction and the sense of urgency we need one of these homeowners to feel in order to work the kind of a deal I write about in the above article, is non-existent as long as the auction keeps getting postponed and postponed again. Did you know that in the last week, there were 9 auctions that were scheduled.

    None of them occurred; of the 9, one was cured and the others were postponed yet another month. Some of these postponements were the 3rd, 4th and even 5th time. This speaks to a much larger topic of economic efficiency, moral economics etc. which I won't address here. The point of this brief blog post on Palos Verdes foreclosures is this -

    • if you're looking for a deal, in this low supply-high demand market a "deal" is sometimes getting the house you bid on at its listed price
    • if you're looking for a deal in the foreclosure market, it's unlikely to ever happen and the time it will take to find that 1 in a 100 deal, so much time will have passed that homes will have appreciated to the point where that "deal" price is more than what you could have paid retail months before.
    Get real, forget about the deal. Think about getting a home you want at a fair price. The "deals" are in Detroit ... have fun moving there. If you would like to investigate the Palos Verdes foreclosures distressed property listings, use this map based search engine: (follow the link to the original content of this article)


    Palos Verdes Foreclosures

    image   // +George Fotion George Fotion on Google+ Original Content: George Fotion, HomeIsPalosVerdes.com
  • Palos Verdes Real Estate and Investment Property Tools

    Posted Under: Investment Properties in Rancho Palos Verdes  |  February 23, 2013 10:13 AM  |  131 views  |  No comments

    You’ve worked hard to buy and own Palos Verdes real estate and now you’re considering to rent it out. A bad tenant can cost you way more money than what the security deposit can pay for. So what are some ways to protect your Palos Verdes real estate investment?

    New and established landlords are feeling the pressure to quickly fill vacancies. As landlords and investors look for predictable positive cash flow, the need for prospective tenant screening becomes a priority for Palos Verdes real estate.

    Traditional ways of tenant screening help but neglect a very important factor - the feedback from previous landlords and property managers on a prospective tenant who may or may not have rented Palos Verdes real estate in the past. There are good property managers who take care of a property owner's interests and mutually benefit with their landlords, but other less scrupulous landlords view this as a means to an end and fill the vacancy to get paid. Such property managers risk almost nothing on their end since they get paid before the consequences of a bad tenant are realized. The rental field lacks a service that would provide landlords with relevant feedback on prospective tenants of Palos Verdes real estate. palos verdes real estateWhat would be an ideal solution to the problem?

    A free and easy to use online service to screen prospective tenants by searching through a large database of feedback left by landlords and property managers on their former tenants. Is such solution possible? If so what would be needed to make it available? There have been multiple attempts to build a website that would serve such a need. Most of them have failed due to lack of financing and/or a clear idea on how to gain user acceptance. While it is apparent that there are no quick ways to build a database of feedback on real estate rental transactions, the situation is not entirely hopeless.

    Here is a list of important factors that could make a new type of screening service successful: The screening and reporting service should be free to attract more users, naturally leading to a faster growth of the tenant database. Registered users should be educated and encouraged to participate in the process of building the database content since it would be ultimately benefiting them. The service should be easy to use without the need for specialized training.

    The owners (providers) of this database system should have enough resources to maintain and further develop and improve the service as well as conduct marketing campaigns. When landlords happen to also be technology professionals, the development of such a service begins to take shape. This is genesis of the new web site http://www.iscreentenants.com. A group of software developers who invested in real estate decided to devote their time and skills to make a long needed service a reality. Participating in such an initiative and referring/encouraging friends, colleagues and other Palos Verdes real estate landlords to do the same will build a database of the feedback that would benefit the entire rental community.

    The site is designed with the novice user in mind and provides an intuitive layout where reports are free and can be entered in a matter of minutes. This valuable service is a small investment in time with potentially infinite cash on cash return. After seeing the substantial impact of community feedback on eBay, Amazon, and other online platforms, we can expect similar results when a similar concept is applied to rental transactions. All that is needed is to join the community of responsible real estate owners and spread the word to automatically contribute to the service that is much needed in today's market.

    Palos Verdes Real Estate Investment Property and South Bay Investment Property Search Tool


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  • Palos Verdes Homes Investors using 1031 Tax Deferred Exchange

    Posted Under: Investment Properties in Palos Verdes Estates  |  February 4, 2013 10:28 PM  |  118 views  |  No comments

    Palos Verdes Homes and 1031 Tax Deferred Exchanges

    This article is written as a summary for investors considering either purchasing or selling Palos Verdes homes as investments or any South Bay real estate. While the information contained here is deemed to be accurate, please understand, this is article shall not be considered as anything but to stimulate questions for you as an investor. I am not a CPA and you should absolutely check with your CPA and/or Tax Attorney before relying on any of the data presented herein. image

    1031 Tax Deferred Exchange FAQs for Palos Verdes homes and South Bay Real Estate

    Every Section 1031 Exchange transaction is different. These "Frequently Asked Questions" are intended to answer general inquiries. The application of these principles will depend on the specific facts of each transaction. Always consult a competent Qualified Intermediary, attorney, or tax advisor to determine how an exchange may best be structured to accomplish your investment objectives.

    Q - What is a tax-deferred exchange?

    In a typical transaction, the property owner is taxed on any gain realized from the sale. However, through a Section 1031 Exchange, the tax on the gain is deferred until some future date.

    Section 1031 of the Internal Revenue Code provides that no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business, or for investment. A tax-deferred exchange is a method by which a property owner trades one or more relinquished properties for one or more replacement properties of "like-kind", while deferring the payment of federal income taxes and some state taxes on the transaction.

    The theory behind Section 1031 is that when a property owner has reinvested the sale proceeds into another property, the economic gain has not been realized in a way that generates funds to pay any tax. In other words, the taxpayer's investment is still the same, only the form has changed (e.g. vacant land exchanged for apartment building). Therefore, it would be unfair to force the taxpayer to pay tax on a "paper" gain.

    The like-kind exchange under Section 1031 is tax-deferred, not tax-free. When the replacement property, such as Palos Verdes homes, is ultimately sold (not as part of another exchange), the original deferred gain, plus any additional gain realized since the purchase of the replacement property, is subject to tax.

    Q - What are the benefits of exchanging v. selling?

    A Section 1031 exchange is one of the few techniques available to postpone or potentially eliminate taxes due on the sale of qualifying properties and Palos Verdes homes.

    By deferring the tax, you have more money available to invest in another property. In effect, you receive an interest free loan from the federal government, in the amount you would have paid in taxes.

    Any gain from depreciation recapture is postponed.

    You can acquire and dispose of properties to reallocate your investment portfolio without paying tax on any gain.

    Q - What are the different types of exchanges for real estate and/or Palos Verdes homes?

    Simultaneous Exchange: The exchange of the relinquished property for the replacement property occurs at the same time.

    Delayed Exchange: This is the most common type of exchange. A Delayed Exchange occurs when there is a time gap between the transfer of the Relinquished Property and the acquisition of the Replacement Property. A Delayed Exchange is subject to strict time limits, which are set forth in the Treasury Regulations.

    Build-to-Suit (Improvement or Construction) Exchange: This technique allows the taxpayer to build on, or make improvements to, the replacement property, using the exchange proceeds.

    Reverse Exchange: A situation where the replacement property is acquired prior to transferring the relinquished property. The IRS has offered a safe harbor for reverse exchanges, as outlined in Rev. Proc. 2000-37, effective September 15, 2000. These transactions are sometimes referred to as "parking arrangements" and may also be structured in ways which are outside the safe harbor.

    Personal Property Exchange: Exchanges are not limited to real property. Personal property can also be exchanged for other personal property of like-kind or like-class.

    Q - What are the requirements for a valid exchange?

    Qualifying Property - Certain types of property are specifically excluded from Section 1031 treatment: property held primarily for sale; inventories; stocks, bonds or notes; other securities or evidences of indebtedness; interests in a partnership; certificates of trusts or beneficial interest; and choses in action. In general, if property is not specifically excluded, it can qualify for tax-deferred treatment.

    Proper Purpose - Both the relinquished property and replacement property must be held for productive use in a trade or business or for investment. Property acquired for immediate resale will not qualify. The taxpayer's personal residence will not qualify.

    Like Kind - Replacement property acquired in an exchange must be "like-kind" to the property being relinquished. All qualifying real property located in the United States is like-kind. Personal property that is relinquished must be either like-kind or like-class to the personal property which is acquired. Property located outside the United States is not like-kind to property located in the United States.

    Exchange Requirement - The relinquished property must be exchanged for other property, rather than sold for cash and using the proceeds to buy the replacement property. Most deferred exchanges are facilitated by Qualified Intermediaries, who assist the taxpayer in meeting the requirements of Section 1031.

    Q - What are the general guidelines to follow in order for a taxpayer to defer all the taxable gain?

    The value of the replacement property must be equal to or greater than the value of the relinquished property.

    The equity in the replacement property must be equal to or greater than the equity in the relinquished property.

    The debt on the replacement property must be equal to or greater than the debt on the relinquished property.

    All of the net proceeds from the sale of the relinquished property must be used to acquire the replacement property.

    Q - When can I take money out of the exchange account?

    Once the money is deposited into an exchange account, funds can only be withdrawn in accordance with the Regulations. The taxpayer cannot receive any money until the exchange is complete. If you want to receive a portion of the proceeds in cash, this must be done before the funds are deposited with the Qualified Intermediary.

    Q - Can the replacement property eventually be converted to the taxpayer's primary residence or a vacation home?

    Yes, but the holding requirements of Section 1031 must be met prior to changing the primary use of the property. The IRS has no specific regulations on holding periods. However, many experts feel that to be on the safe side, the taxpayer should hold the replacement property for a proper use for a period of at least one year.

    If the owner later on wants to take advantage of the home owner's exemption (up to $250,000 or $500,000 for a couple), there is now a five year holding period requirement.

    Q - What is a Qualified Intermediary (QI)?

    A Qualified Intermediary is an independent party who facilitates tax-deferred exchanges pursuant to Section 1031 of the Internal Revenue Code. The QI cannot be the taxpayer or a disqualified person.

    Acting under a written agreement with the taxpayer, the QI acquires the relinquished property or Palos Verdes homes and transfers it to the buyer.

    The QI holds the sales proceeds, to prevent the taxpayer from having actual or constructive receipt of the funds.

    Finally, the QI acquires the replacement property and transfers it to the taxpayer to complete the exchange within the appropriate time limits.

    Q - Why is a Qualified Intermediary needed?

    The exchange ends the moment the taxpayer has actual or constructive receipt (i.e. direct or indirect use or control) of the proceeds from the sale of the relinquished property. The use of a QI is a safe harbor established by the Treasury Regulations. If the taxpayer meets the requirements of this safe harbor, the IRS will not consider the taxpayer to be in receipt of the funds. The sale proceeds go directly to the QI, who holds them until they are needed to acquire the replacement property. The QI then delivers the funds directly to the closing agent.

    Q - Can the taxpayer just sell the relinquished property and put the money in a separate bank account, only to be used for the purchase of the replacement property?

    The IRS regulations are very clear. The taxpayer may not receive the proceeds or take constructive receipt of the funds in any way, without disqualifying the exchange.

    Q - If the taxpayer has already signed a contract to sell the relinquished property, is it too late to start a tax-deferred exchange?

    No, as long as the taxpayer has not transferred title, or the benefits and burdens of the relinquished property, she can still set up a tax-deferred Exchange. Once the closing occurs, it is too late to take advantage of a Section 1031 tax-deferred exchange (even if the taxpayer has not cashed the proceeds check).

    Q - Does the Qualified Intermediary actually take title to the properties?

    No, not in most situations. The IRS regulations allow the properties to be deeded directly between the parties, just as in a normal sale transaction. The taxpayer's interests in the property purchase and sale contracts are assigned to the QI. The QI then instructs the property owner to deed the property directly to the appropriate party (for the relinquished property, its buyer; for the replacement property, taxpayer).

    Q - What are the time restrictions on completing a Section 1031 exchange?

    A taxpayer has 45 days after the date that the relinquished property is transferred to properly identify potential replacement properties such as Palos Verdes homes. The exchange must be completed by the date that is 180 days after the transfer of the relinquished property, or the due date of the taxpayer's federal tax return for the year in which the relinquished property was transferred, whichever is earlier. Thus, for a calendar year taxpayer, the exchange period may be cut short for any exchange that begins after October 17th. However, the taxpayer can get the full 180 days, by obtaining an extension of the due date for filing the tax return.

    Q - What if the taxpayer cannot identify any replacement property within 45 days, or close on a replacement property before the end of the exchange period?

    Unfortunately, there are no extensions available. If the taxpayer does not meet the time limits, the exchange will fail and the taxpayer will have to pay any taxes arising from the sale of the relinquished property, unless the IRS has expressly granted extensions in specified disaster area(s).

    Q - Is there any limit to the number of properties that can be identified?

    There are three rules that limit the number of properties that can be identified. The taxpayer must meet the requirements of at least one of these rules:

    3-Property Rule: The taxpayer may identify up to 3 potential replacement properties, without regard to their value; or

    200% Rule: Any number of properties may be identified, but their total value cannot exceed twice the value of the relinquished property, or

    95% Rule: The taxpayer may identify as many properties as he wants, but before the end of the exchange period the taxpayer must acquire replacement properties with an aggregate fair market value equal to at least 95% of the aggregate fair market value of all the identified properties.

    Q - What are the requirements to properly identify replacement property?

    Potential replacement property must be identified in a writing, signed by the taxpayer, and delivered to a party to the exchange who is not considered a "disqualified person". A "disqualified" person is any one who has a relationship with the taxpayer that is so close that the person is presumed to be under the control of the taxpayer. Examples include blood relatives, and any person who is or has been the taxpayer's attorney, accountant, investment banker or real estate agent within the two years prior to the closing of the relinquished property. The identification cannot be made orally.

    Q - Are Section 1031 Exchanges limited only to real estate?

    No. Any property that is held for productive use in a trade or business, or for investment, may qualify for tax-deferred treatment under Section 1031. In fact, many exchanges are "multi-asset" exchanges, involving both real property and personal property.

    imageQ - What is a "multi-asset" exchange?

    A multi-asset exchange involves both real and personal property. For example, the sale of a hotel will typically include the underlying land and buildings, as well as the furnishings and equipment. If the taxpayer wants to exchange the hotel for a similar property, he would exchange the land and buildings as one part of the exchange. The furnishings and equipment would be separated into groups of like-kind or like-class property, with the groups of relinquished property being exchanged for groups of replacement property.

    Although the definition of like-kind is much narrower for personal property and business equipment, careful planning will allow the taxpayer to enjoy the benefits of an exchange for the entire relinquished property, not just for the real estate portion.

    Q - What is a reverse exchange?

    A reverse exchange, sometimes called a "parking arrangement," occurs when a taxpayer acquires a Replacement Property before disposing of their Relinquished Property. A "pure" reverse exchange, where the taxpayer owns both the Relinquished and Replacement properties at the same time, is not allowed. The actual acquisition of the "parked" property is done by an Exchange Accommodation Titleholder (EAT) or parking entity.

    Q - Is a reverse exchange permissible?

    Yes. Although the Treasury Regulations still do not apply to reverse exchanges, the IRS issued "safe harbor" guidelines for reverse exchanges on September 15th, 2000, in Revenue Procedure 2000-37. Compliance with the safe harbor creates certain presumptions that will enable the transaction to qualify for Section 1031 tax-deferred exchange treatment.

    Q - How does a reverse exchange work?

    In a typical reverse (or "parking") exchange, the "Exchange Accommodation Titleholder" (EAT) takes title to ("parks") the replacement property and holds it until the taxpayer is able to sell the relinquished property. The taxpayer then exchanges with the EAT, who now owns the replacement property. An exchange structured within the safe harbor of Rev. Proc. 2000-37 cannot have a parking period that goes beyond 180 days.

    Q - What happens if the exchange cannot be completed within 180 days?

    If the reverse exchange period exceeds 180 days, then the exchange is outside the safe harbor of Rev. Proc. 2000-37. With careful planning, it is possible to structure a reverse exchange that will go beyond 180 days, but the taxpayer will lose the presumptions that accompany compliance with the safe harbor.

    Q - Can the proceeds from the relinquished property be used to make improvements to the replacement property?

    Yes. This is known as a Build-to-Suit or Construction or Improvement Exchange. It is similar in concept to a reverse exchange. The taxpayer is not permitted to build on property she already owns. Therefore, an unrelated party or parking entity must take title to the replacement property, make the improvements, and convey title to the taxpayer before the end of the exchange period.

    Q- What is the difference between "realized" gain and "recognized" gain?

    Realized gain is the increase in the taxpayer's economic position as a result of the exchange. In a sale, tax is paid on the realized gain. Recognized gain is the taxable gain. Recognized gain is the lesser of realized gain or the net boot received.

    Q - What is Boot?

    Boot is any property received by the taxpayer in the exchange which is not like-kind to the relinquished property. Boot is characterized as either "cash" boot or "mortgage" boot. Realized Gain is recognized to the extent of net boot received.

    Q - What is Mortgage Boot?

    Mortgage Boot consists of liabilities assumed or given up by the taxpayer. The taxpayer pays mortgage boot when he assumes or places debt on the replacement property. The taxpayer receives mortgage boot when he is relieved of debt on the replacement property. If the taxpayer does not acquire debt that is equal to or greater than the debt that was paid off, they are considered to be relieved of debt. The debt relief portion is taxable, unless offset when netted against other boot in the transaction.

    Q - What is Cash Boot?

    Cash Boot is any boot received by the taxpayer, other than mortgage boot. Cash boot may be in the form of money or other property.

    Q - What are the boot "netting" rules?

    Cash boot paid offsets cash boot received

    Cash boot paid offsets mortgage boot received (debt relief)

    Mortgage boot paid (debt assumed) offsets mortgage boot received

    Mortgage boot paid does not offset cash boot received

    Q - I bought the property as a single person and I would like to acquire the replacement property together with my spouse?

    The most conservative way is to stay consistent and complete the exchange the same way it was started and to add the spouse after the completion of the exchange. An exception can be made if there is a lender requirement that the spouse has to be added in order to qualify for a loan. If an exchange is planned well ahead of time, another solution would be to add the spouse to the title of the currently held property. Timing should be discussed with the CPA.

    Q - I closed escrow on my first replacement property within the 45 day identificationperiod. Can I now identify three more properties within my 45 day identification period?

    If you are using the three property rule, the completed acquisition counts as one and you may identify only up to two additional properties.

    Q - How do I identify two different properties (or percentages of ownership through a TIC) covered by ONE purchase contract?

    If the properties could be sold separately at a later date, they should be identified as two properties.

    A 92 Year-Old Solution for Real Estate Investors of Palos Verdes Homes or South Bay Real Estate
    Facing Higher Taxes in 2013:

    1031 Exchanges Offer Full Deferral of the
    New 3.8% Medicare Surtax 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.

    Snapshot of 2013 Federal Capital Gain Tax Rates

    Single Taxpayer
    Married Filing Jointly
    Capital Gain
    Tax Rate
    Section 1411
    Medicare Surtax
    Tax Rate
    $0 - $36,250
    $0 - $72,500
    $36,250 - $200,000
    $72,500 - $250,000
    $200,000 - $400,000
    $250,000 - $450,000
    *The 3.8% Medicare surtax only applies to "net investment income" as defined in IRC §1411.

    1031 Exchanges Help Investors Defer the New 3.8% Medicare Surtax

    Under recently proposed regulations, REG-130507-11, taxpayers have received proposed guidance from the IRS that notes: “to the extent gain from a like-kind exchange is not recognized for income tax purposes under Section 1031, it is not recognized for purposes of determining net investment income under Section 1411.” [§1.1411-5(C)(i)(2)(ii)]. Although these regulations are not yet finalized, taxpayers may rely on the proposed regulations to be in compliance with Section 1411 until the effective date of the final regulations.

    Despite these new tax increases, one aspect of the tax code provides real estate investors with a huge tax advantage. Section 1031 allows property owners holding property for investment purposes to defer taxes that would otherwise be recognized upon the sale of investment property. Savvy investors use 1031 exchanges to redeploy their investment capital into better performing investment properties. An exchange provides a fantastic opportunity for investment property owners to defer all capital gain taxes that would otherwise be owed.


    Written 2012


    The Tax Relief, Unemployment Insurance Reauthorization and Jobs Creation Act of 2010 extends the Bush-era tax cuts until the end of 2012. Beginning January 1, 2013, the tax rate will revert from the current 15 percent rate back to the former 20 percent capital gain tax rate that was in effect prior to 2003.


    Beginning in 2013, the national health care reform legislation that became law in March, 2010, imposes a new 3.8 percent tax on certain investment income. The new tax will apply to single filers with incomes over $200,000 and married taxpayers with incomes over $250,000. Under the law, the investment tax provisions in Chapter 2A of the Internal Revenue Code are placed under the heading “Unearned Income Medicare Contribution.” In general, this new Medicare tax will apply to investment income that is subject to income tax, which includes capital gains. Pursuant to IRC Section 1402 (C)(1)(A)(iii), the investment income to which this new tax applies includes “net gain” (to the extent taken into account in computing taxable income) attributed to the disposition of property that qualifies as a capital asset under Section 121 (capital gains), as well as gains on other property that are considered part of ordinary income. Also of relevance for rental property owners, this new tax applies to a real estate investor’s rental income if they have income above the $200,000/$250,000 income thresholds.

    The net effect of both capital gain tax increases is a new 23.8 percent tax rate for higher earners—the highest rate for long-term capital gains since 1997. The Joint Committee on Taxation estimates the new Medicare tax on investments will cost taxpayers over $30 billion annually. Additionally, the modified adjusted gross income threshold at which this Medicare tax will apply will not be indexed for inflation, which means an increasing number of taxpayers will be snared by this tax provision.

    Overall, the economic impact of these tax increases will be felt by the very investors who help promote long-term economic growth. In 2007, taxpayers with incomes greater than $200,000 reported 47 percent of all interest income, 60 percent of all dividends and an amazing 84 percent of all capital gains.


    Current January 2013
    Conventional Short-Term 35.0% 43.4%
    Conventional Long-Term 15.0% 23.8%
    AMT Short-Term 28.0% 31.8%
    AMT Long-Term 15.0% 23.8%


    Since 1921, 1031 exchanges have been a proven tax saving strategy that helps real estate investors improve their investment position through the ability to not recognize Federal or state capital gain taxes. Contact Asset Preservation at 800.282.1031 or via email at info@apiexchange.com!

    Use Asset Preservation’s Capital Gain Tax Calculator to obtain an approximate estimate of your capital gain tax liability. Enter your figures in the fields provided and click on the 'Calculate' button in each area to determine your capital gain.Calculate Your Capital Gain Taxes Now.

    Ordinary Income vs. Capital Gain
    2012 Reviewed and Changes for 2013
    Impact of New 3.8% Medicare Tax on Investors
    What is a 1031 Exchange?
    What is a Qualified Intermediary?
    5 Reasons to Exchange
    1031 Exchange Basics
    FIRPTA Withholding Rules
    The Delayed Exchange
    Calculating Capital Gain

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  • Palos Verdes Estates Homes Scheduled for Auction: Bargains?

    Posted Under: Market Conditions in Palos Verdes Estates, Home Buying in Palos Verdes Estates, Investment Properties in Palos Verdes Estates  |  November 16, 2012 9:58 PM  |  136 views  |  No comments

    Palos Verdes Estates Homes scheduled for auction

    Could mean a really good bargain for someone if the owner of this home is open minded to a short sale.

    • Why is this?
    • How can it be negotiated?

    Find out more here on distress homes in Palos Verdes website


    On 11/16/2012, a notice of trustee sale was filed on this home in Palos Verdes Estates

    • It has 2300+ Sqft
    • On a 12,000+ Sqft Lot
    • With 4 Bedrooms and 3 Bathrooms

    For more information visit the Palos Verdes Short Sales website

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  • Palos Verdes CA Foreclosure Report

    Posted Under: Market Conditions in Palos Verdes Estates, Foreclosure in Palos Verdes Estates, Investment Properties in Palos Verdes Estates  |  June 14, 2012 9:15 PM  |  212 views  |  No comments
  • No downturn in Multi Family Beach Cities Market

    Posted Under: Market Conditions in Manhattan Beach, Investment Properties in Manhattan Beach  |  June 7, 2012 1:41 PM  |  212 views  |  No comments


    Distressed Residential Income Property Located in The Beach Cities

    Many investors focus on the distressed real estate market to find “deals”. While there are no guarantees that any of these owners will consider an offer (to my knowledge, none of these properties are currently listed for sale), clearly these owners are experiencing financial difficulties that could be cured by selling.

    If you’re an investor looking for prime location multi family residential income property in Manhattan Beach, El Segundo, Redondo Beach or Hermosa Beach, this list could provide a good start for you. The list frequently changes so let me know if you want an updated list. While providing that service for you is free of any costs, I do expect that you will choose me to represent you in the purchase or sale of real estate.

    I want you to take a good luck at the chart below. Buying investment property in the South Bay during the last 10 years (even if you had bought at the peak of the market in the 4th quarter of ‘06) would have made you money! At worst, you would have broken even and then when you add in the income and tax benefits, you would be doing pretty well!

    Meanwhile to find income property now for sale in the South Bay, please follow the link in the yellow tab below

    Click on the map below to view the latest distressed properties in foreclosure or scheduled for auction.


    If you want to see a larger version of this chart, just click the image


    Homes for sale in Palos Verdes Estates
    Homes for sale in Rolling Hills Estates
    Homes for sale in Rancho Palos Verdes
    Homes for sale in Rolling Hills
    South Redondo Beach homes for sale
    Hermosa Beach homes for sale
    Manhattan Beach homes for sale
    South Torrance homes for sale
    George Fotion
    Call Realty Company
    (310) 346-6467
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