Wendland and Associates - Premiere Ranches and Estates

Fall Outlook
Author: Nancy Wendland
Email: nwendland@ktc.com
Sep 11 2008
 

 

Fall Outlook


Fall OutlookThe real estate market has been active. There have been a lot of calls regarding properties, a lot of showings on properties, but not a lot of contracts. The Buyer’s market has allowed them to pick and choose properties and always looking for the "deal". The uncertainty of the elections, market news, and the state of the world politics is generating more Buyers with a "wait and see" attitude. We don’t see a lot of change until after the November elections.

The bright spot on the horizon has been the focus on energy opportunity and alternatives. Kenneth has been researching all aspects of wind related, oil, solar, gas, and water rights properties. Pickens has carried our message to the public via national television. Please call if you or your clients have an interest in any of the energy alternatives. We see a "window of opportunity" to invest in properties suitable for alternative energy development.

I have just completed an interesting article about 1031 exchanges regarding mineral rights. It is common knowledge that mineral interests are changing hands at a feverish pace. What is a lesser known fact is that Uncle Sam does not have to be a partner in these transactions. Both the Buyer and Seller benefit when capital-gains taxes do not have to be subtracted from the sales price. Section 1031 states that no gain or loss shall be recognized (taxed) if property held for productive use in a trade or business or held for an investment is exchanged solely for a like-kind. 

1. "Exchange" does not mean that the Seller and the Buyer Exchange anything.
2. "Like-kind" does not mean that the Seller of a mineral Interest has to buy another mineral interest.

The following are examples of valid exchanges: 
• Mineral interest for an investment resort property
• Interest in a producing oil lease extending until the exhaustion of the deposit for a ranch
• Overriding royalty for unimproved real estate
• Overriding royalty for an undivided interest in a parcel of improved realty
• Perpetual water rights for a fee interest in land
Property owners can have their cake and eat it too if they research 1031 exchanges. Check with your tax advisor to see if you qualify.

If you would like to read the article in its entirety please go to this link

http://apiexchange.com/apimain/0page/Landman_2.08.pdf

 
 
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