1031 Exchanges

Investors can defer taxes by selling an investment property and using the equity to purchase another property in what is known as a 1031 like-kind exchange.

The 1031 exchange, named for Section 1031 of the Internal Revenue Code, allows investors to defer taxes by selling one investment property and using the equity to purchase another property or properties of equal or greater value. This exchange must occur within a specified period of time.

The investor is subject to two deadlines:

• Forty-five days after the sale of the relinquished property they must deliver a written list of the qualified replacement property to a qualified party to the exchange, usually the intermediary (typically you can identify up to 3 properties, but you do not need to purchase all properties you identify)
• Additionally, they must purchase the aggregate value of qualifying replacement assets within 180 days of selling the relinquished asset or 180 days after the due date of their tax return for that year, whichever occurs first.

Want more information? The Nome Chamber of Commerce Member Enrichment Series has an expert speaking on this topic Thursday, January 27th, 2022! This particular event is free and open to the public.

Nome Chamber of Commerce Member Enrichment Series – 1031 Exchange Basics By First American Title

Meeting Date: January 27, 2022 @ noon, zoom or in person at Nome Public Safety Building

The Basics of 1031 Exchange

Find out more about how 1031 Exchange works and benefits investors in real estate.

Topics discussed include:

• What is a 1031 Exchange?
• 1031 Exchange Requirements & Qualifications
• What is a Qualified Intermediary?
• What is Like-Kind?
• Reason to Exchange
• Timeframes for an Exchange
• Identification Rules
• Vesting

Join Zoom Meeting Click HERE
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Meeting ID: 841 1607 9870
Passcode: 374987
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Time to file for PFD!

It’s that time of year again! You can now file for your 2022 PFD!

Here is a link to PFD to file and for more information: https://pfd.alaska.gov/

Why is appraisal sq ft different?

The difference often comes down to official “living space” versus the total space of the house.

An agent may calculate square footage based on how much living space there is—in other words, areas of the home that are heated such as the kitchen, bathrooms, bedrooms, and so on.

The appraiser, on the other hand, evaluates the total value of a home. That means calculating square footage that includes everything, even an unheated basement, attic, and other nonliving spaces.

This inclusive number should have been recorded by the local municipality when the home was built because it’s used for tax purposes.

Lots for sale 5 miles on Beam Road

Lot 2 Native Hill Subdivision, 3.69 Acres

If you imagine living just outside city limits on a large parcel with stunning views of Bear Mountain, Nome River and the Bering Sea, this is your lot! The location has year round access, maintained by the state, so you are always a short drive into town. Most of the subdivision lots are owner occupied with permanent residents, so you have fantastic neighbors.

This lot has power access, however well and septic would be the responsibility of the buyer.

One of the beautiful things about building outside of the city limits is NO TAXES or building permits needed!

1031 Exchanges

Investors can defer taxes by selling an investment property and using the equity to purchase another property in what is known as a 1031 like-kind exchange.

The 1031 exchange, named for Section 1031 of the Internal Revenue Code, allows investors to defer taxes by selling one investment property and using the equity to purchase another property or properties of equal or greater value. This exchange must occur within a specified period of time.

The investor is subject to two deadlines:

• Forty-five days after the sale of the relinquished property they must deliver a written list of the qualified replacement property to a qualified party to the exchange, usually the intermediary (typically you can identify up to 3 properties, but you do not need to purchase all properties you identify)
• Additionally, they must purchase the aggregate value of qualifying replacement assets within 180 days of selling the relinquished asset or 180 days after the due date of their tax return for that year, whichever occurs first.

Flood Insurance Risk Rating 2.0

1. FEMA is replacing an inaccurate rating system that has not been updated in half a century and is not sustainable for homeowners or taxpayers as it’s based on 50-year-old technologies and only two pieces of information about a property—in this case, flood zone and base elevation certificate. If FEMA did not make these changes, NFIP rates would continue to climb 18% to 25% per year until reaching the current top rate of $63,000 for a $250,000 home.
2. Risk Rating 2.0 will reduce the top rate in the program from $63,000 to $12,000 per year. One million homeowners will see a significant rate decrease while the majority of other homeowners will pay a slight increase. Each home will be priced individually using modern industry technologies, a dozen flood risk variables, and property-specific characteristics including elevation, distance to water, and cost to rebuild. Low-value properties will no longer subsidize high-value properties, and elevation certificates are not required for an accurate rating.
3. Because each property is now rated individually, only a licensed insurance agent will be able to tell your client whether their rate is going up or down under the new system.

What Isn’t Changing Under Risk Rating 2.0

1. Risk Rating 2.0 applies only to risk-based NFIP rates and will not affect flood mapping or insurance requirements, which will continue to be enforced by Congress, local communities and lenders.
2. Grandfathered rates, including for newly mapped or pre-Flood Insurance Rate Map (FIRM) subsidized properties, will continue. By law, increases will not be more than 18% per year.
3. Policyholders will still be able to transfer their grandfathered rates and other discounts to a buyer/new owner by assigning their flood insurance policy at the time of the sale of the property.

Can an email be a contract?

Be careful before you press send—

The case involved settlement negotiations that occurred over an email exchange between two attorneys. The attorneys were negotiating a settlement and one of the messages contained a certain dollar amount for settlement. That email contained a standard signature block but did not include the attorney’s typed signature. The other attorney confirmed the agreement.

A trial court ruled that the email exchange did not create a binding agreement because the sender did not type their name in the email message. Previous cases have stated that as well.

But on appeal, a higher court reversed that ruling.

Pressing ‘send’ on an email could be considered a signature, per the appeals court ruling.

The court also ruled that for an email to bind parties, it must summarize all “material” terms of the deal, such as amount to be paid.

Put a standard email disclaimer stating that automatically on every message. But still, even with a disclaimer in place, watch your messaging before you press send

source: NYcourts.gov

Only one lot left in Helena Subdivision!

One acre lot with owner finance available for qualified buyers! This lot has easy access to power, well and septic would need to be installed by the buyer.

5plus Acres with A-Frame Cabin

One of the best lots in Banner Creek! Gorgeous views of mountains and down the Nome River.

The a-frame cabin needs a little TLC, but is on strong pilings. Electric is ran to the Aframe. Large workshop & dry storage.