2A — April 28 - May 11, 2017 — M id A tlantic
Real Estate Journal
M id A tlantic Real Estate Journal
M id A tlantic R eal E state J ournal Publisher .....................................................Linda Christman Associate Publisher ......................................... Steve Kelley Associate Publisher ........................................... Kim Brunet Associate Publisher ......................................Lea Christman Senior Editor/Graphic Artist ..........................Karen Vachon Office Manager ............................................Joanne Gavaza Sales Intern .................................................Kevin Minassian Contributing Columnists ... Eric Nelson, Woloshin Investment Management; Gregg Newell, Nave Newell Mid Atlantic R eal E state J ournal ~ Published Semi-Monthly Periodicals postage paid at Rockland, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal 350 Lincoln St, Suite 1105, Hingham, MA 02043 USPS #22-358 | Vol. 29 Issue 9 Subscription rates: $99 - one year, $198 - two years, $4 - single copy REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Phone: 781-740-2900 | Fax: 781-740-2929 www.marejournal.com The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal
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The Mid Atlantic Real Estate Journal is a monthly publication highlighting real estate transactions throughout the Mid Atlantic including : • New developments, ground breakings and reconstruction in the ODM (Owners, Managers & Contractors ) section • Mortgage and banking in our Financial Digest • Retail and new developments in Shopping Centers • Annual spotlights.
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Why You Can’t Get Your Prospect To List That Property W hy can’t you con- vince your prospect to list their prop- erty with you? The highly appreciated property they’ve owned for years. You’ve told them about the great resourc- es you have to market that property and secure the best price for them, and that now is the time to sell. Everything points to selling, yet they won’t do it. Why? Well, the problem may very well be that they actually want to sell but are concerned about capital gains taxes draining their sales proceeds and depleting their wealth. The simple solution is a 1031 Exchange. But the very reason they may want to sell is their current ability to secure what they perceive to be an attractive price in an appreciated market. But, a 1031 exchange transaction will require that prospect to reinvest in replacement real estate in a very short period of time. In fact, they must identify their replacement real estate within a strictly enforced time period of 45 days from the date of closing or lose the opportunity for tax deferral under Section 1031. Reinvesting in real estate under these conditions could be counterintuitive to your prospect’s goals and, therefore, even a 1031 Exchange may not be attractive or useful. Well, a better solution for them may
Linda Christman, CEO/Publisher Mid Atlantic Real Estate Journal 350 Lincoln Street, Suite 1105 Hingham, MA 02043 P: 781-740-2900 | F: 781-740-2929
• Region specific news and spotlights in our Pennsylvania and New Jersey sections
result is that the taxpayer’s capital gain taxes are deferred under the installment sale rules and the relinquished property is sold from the trust, leaving the pre-tax proceeds to be invested within the trust in a manner that will secure the note principal. These invest- ments can include a variety of investment vehicles including stocks, bonds, mutual funds, etc. The proceeds can even be invested in conventional real estate down the road. There is a good deal of flex- ibility in the way that a DST can be structured. The client can structure the note for income, growth, or both, and with additional planning can often be used to resolve estate tax exposure as well. Regard- less of the goals of the indi- vidual taxpayer, though, it is crucial that the DST structure be implemented in advance of the closing on the sale of the asset that the taxpayer wishes to defer capital gains taxes on, and preferably in advance of a firm sales agreement. Eric Nelson is a financial advisor for Woloshin In- vestment Management. n “We are excited to have Staples as a tenant at the Delaware River Industrial Park and proud to be a part of their expansion,” said Thomas Hanna , COO / managing director, HHA. Colliers International served as Staples tenant representative for this lease transaction. This is the second new ten- ant to the Delaware River Industrial Park in 2017. American Training Driver Academy recently leased 4,685 s/f of office and 1.5 acres of training space at 618 Lambson Lane. n
be The Deferred Sales Trust™. The Deferred Sales Trust™ has become a popular strategy for deferring capital gains taxes upon the sale of real estate and other highly appre- ciated assets. Like a 1031 Ex- change, the DST can be used to defer capital gains taxes on real estate but, unlike a 1031 Exchange, it does not require that the taxpayer reinvest in like-kind property, thereby providing the opportunity for diversification of assets. Moreover, the DST can be used to defer capital gains taxes on other high value assets such as a taxpayer’s business, including goodwill, which is typically not appropriate for 1031 Exchange treatment. Here’s a simplified explana- tion of how the DST works: The client sells their asset to a third party trust in a seller- financed transaction (in whole or in part) under IRC Section 453. In return, the taxpayer receives an installment note with a specified rate of return. The trust then sells the asset at the new basis (established under the sale to the trust) to the third party buyer. The ness customers a broad as- sortment of products and expanded services in its stores, on Staples.com or through Staples Business Advantage, its business-to- business division that caters to mid-market, commercial and enterprise-sized custom- ers. The company opened its first store in Brighton, Massachusetts in May of 1986. Staples, Inc. currently has seven retail locations in Delaware. The new location at 6 Dock- view drive will serve as a fulfillment center for Staples business customers through- out the region.
There’s more than one way to SELL apprEciatEd aSSEtS
if you’re thinking of selling a business, second home or commercial real estate investment with a large amount of gain, you’ve got four choices: pay the capital gains tax and 1245 depreciation recapture taxes. Ouch! 1031 Exchange. But what if you can’t find a suitable property and close by the deadline? deferred Sales trust’ ... defers capital gains, reduces estate taxes, creates liquidity. don’t Sell. But what if the asset is losing value and you want to cash out? the deferred Sales trust tM offers clear advantages. This tax code compliant strategy reduces capital gains tax impact while creating the potential to earn investment income on money you would have paid to the IRS. Benefits include tax deferral, with additional planning reduced estate taxes, conversion of an illiquid asset into estate liquidity, potential provision of retirement income, elimination of risk and possible reduction of some probate fees. 1 2 3 4
there is a Better Way Out! call Eric today!
HHAwelcomes Staples, Inc. to Delaware River Industrial Park
New Castle, DE — Harvey, Hanna & Associ- ates, Inc. (HHA) welcomed
Staples, Inc. to the Dela- ware River I ndus t r i a l Park in New Castle. S t a p l e s , Inc. recent- ly opened a new fulfill- ment center
leasing 25,000 sf of ware- house and office space at 6 Dockview Dr. located in the Delaware River Industrial Park. Staples, Inc. provides busi-
For Additional Information please contact Eric Nelson Woloshin Investment Management 40 North Main Street, Medford, NJ 08055 Eric@WoloshinLLC.com | 856-294-7560
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