Commercial Investment Real Estate Disposition Strategies
The disposition strategy you employ when investing in a property can be a critical factor in driving its profit potential. This interactive course examines the array of disposition strategies available to commercial real estate investors. Learn through case studies how to choose the most beneficial disposition strategy for a specific situation. Disposition methods reviewed include outright (all-cash) sales, installment sales, sale-leaseback, and exchanges. Learn about tax-deferred 1031 exchanges, how to transfer the equity from one property into another and avoid paying taxes, and the types of investors who may want to dispose of their properties today to earn a higher return in another property.
After this course, you will be able to:
- Explain what constitutes an outright (all-cash) sale
- Identify the tax consequences of an installment sale
- Note disposition strategies that allow an investor to postpone the reporting of gain on a sale
- Describe the concept of the exchange
- List the advantages of tax-deferred exchanges
- Explain the wording of IRC Section 1031
- Identify time frames for completing exchanges
- Explain Starker's role in shaping the exchange rules
- Identify specific guidelines regarding exchanges
- Define the concept of the Reverse Starker
- Identify the time frames used in a Reverse Starker
- List the conditions needed for a transaction to qualify as a Reverse Starker
- Determine when gain on sale needs to be recognized
- Describe what qualifies as unlike property and list types of unlike property
- Identify disposition alternatives given no cost recovery is remaining on a property
- Explain how to transfer the equity from one property into another and avoid paying taxes on the transaction
- List the types of investors who may want to dispose of their properties today to earn a higher return in another property
- Recommend the best disposition alternative given an investor's specific needs
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