The Wall Street Journal reported today that Fannie Mae has asked the U.S. government for an additional $8.4 billion in aid after posting an $11.5 billion loss for the first quarter of 2010, the latest sign that the bailout of the mortgage investor and its main rival, Freddie Mac, is likely to be the most expensive legacy of the U.S. housing-market bust.
The total price tag for Fannie and Freddie could exceed $145 billion, easily becoming the costliest element of the government's rescue of the financial system.
Leading Republican lawmakers are pushing for an amendment to the legislation to overhaul financial regulation that would wind down the government controlled mortgage finance giants.
The amendment has been proposed by Republican Senators, including John McCain (Ariz.)
and calls for the government to end its control of the companies within 2 years.
Senator McCain has been quoted as saying" Fannie Mae and Freddie Mac" are synonymous with mismanagement and waste and have become the face of too big to fail. The time has come to end Fannie Mae and Freddie Mac's taxpayer-backed free ride and require them to operate on a level playing field.
Tuesday, May 11, 2010
Wednesday, May 5, 2010
Considering a Tax Deferred Exchange "1031 Exchange"
A 1031 exchange, commonly referred to as "tax deferred exchange", is a simple strategy of selling one property, that's qualified and then proceeding with the purchase of another property, that also qualifies, within certain time frames established by the IRS.
The "1031 exchange" is unique because is allows the transaction to be treated as an exchange of one property for another and not just as a simple sale. It is this difference (exchange vs. buying and selling) which allows the taxpayer to qualify for a deferred gain treatment and in the end defer capital gain taxes.
To qualify, the taxpayer must sell and purchase "like kind" property, which generally is real estate (and must be property held for the production of income) and comply with 2 specific time lines established by the IRS.
First the taxpayer must identify the replacement property within 45 days from the day of selling the first property (referred to as the relinquished property).
Second, the taxpayer must close on and receive the replacement property within 180 days after the date on which the taxpayer transfers or closes on the sale of the relinguished property.
If you think this type of transaction might benefit you, then it is important that you check with your attorney or tax advisor before electing to proceed with a tax deferred exchange. In addition, it is important to chose a reputable qualified intermediary to assist with the transaction.
First Nebraska Title & Escrow Co., can provide valuable services as a Qualified Intermediary and is available to answer your questions relating to tax deferred exchanges.
The "1031 exchange" is unique because is allows the transaction to be treated as an exchange of one property for another and not just as a simple sale. It is this difference (exchange vs. buying and selling) which allows the taxpayer to qualify for a deferred gain treatment and in the end defer capital gain taxes.
To qualify, the taxpayer must sell and purchase "like kind" property, which generally is real estate (and must be property held for the production of income) and comply with 2 specific time lines established by the IRS.
First the taxpayer must identify the replacement property within 45 days from the day of selling the first property (referred to as the relinquished property).
Second, the taxpayer must close on and receive the replacement property within 180 days after the date on which the taxpayer transfers or closes on the sale of the relinguished property.
If you think this type of transaction might benefit you, then it is important that you check with your attorney or tax advisor before electing to proceed with a tax deferred exchange. In addition, it is important to chose a reputable qualified intermediary to assist with the transaction.
First Nebraska Title & Escrow Co., can provide valuable services as a Qualified Intermediary and is available to answer your questions relating to tax deferred exchanges.
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