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Shipping containers and cargo trailers are some of the most versatile assets in the world. As they can be used to store just about anything (including people), shipping containers have been utilized by many real estate developers far and wide seeking spacious protection from the outside elements.

If you are a company or private investor with connections in the manufacturing or transportation industries, then you may have an opportunity to sell shipping containers in large quantities to independent developers. With big-ticket deals pushing into the five digits, considerable taxed amounts can accumulate after the sale of a shipping container.

In the United States, taxpayers have the unique opportunity to defer capital gains taxes paid on large assets such as cargo and shipping containers with a 1031 exchange. By doing so, the potential profit of the sale can be maximized with the investment in a new property. Below, we will break down the steps of a 1031 exchange in detail when selling a shipping container.

How to Sell Shipping Containers

For a lot of people, selling a shipping container is the easy part. Shipping containers are bought and sold on the open market, now more than ever. Finding a buyer is generally not difficult when exploring the available avenues of today like online listings and networking.

This is especially true as demand for shipping containers has skyrocketed in recent years. Depending on the condition and quantity of your shipping containers, companies and representatives from the following industries may be interested in a purchase:

  • Transportation
  • Commercial development (shops, restaurants, parking, etc.)
  • Residential development (homes, condos, apartments, etc.)
  • Public development (schools, libraries, etc.)
  • Determining the Value of Trailers and Shipping Containers

For sellers, increased global demand for high-quality shipping containers has increased the average cost per unit by estimates over 300%. While the cost to purchase can still be considered relatively low, it is the cost to ship the containers, ironically, that typically drives up the value by two or three times the original buying price. With transportation in mind, the sale of a large fleet of containers is typically maximized when finding a local seller.

Taxes Paid on Selling Cargo and Shipping Containers

While one or two shipping containers are unlikely to warrant considerable taxation, big industry sales may be forced to turn over nearly 40% of their earnings to federal and local governments. Aside from sales and local taxes, considerable transactions may also require single sellers to pay capital gains taxes on the release of the asset. As we have mentioned above, this can be avoided by utilizing a 1031 exchange.

Selling Trailers and Containers with a 1031 Exchange

Capital gains taxes essentially penalize investors for liquidating their property. In an effort to retain as much capital as possible, a 1031 exchange is used to virtually “trade” an asset for a sold item, deferring capital gains taxes.
If you were to sell your inventory of shipping containers, then you would be able to eliminate all capital gains taxes otherwise paid if you choose to purchase a new asset through a 1031 exchange. Likewise, partial deference is possible through the reinvestment of one or multiple lower-valued items.

Trailers and Containers Like-Kind Properties

When “trading” properties in a 1031 exchange, shipping containers must be replaced with an asset that is a “like-kind” property. Under the IRS code, most personal property can qualify for a reasonable exchange with a shipping container, which includes both tangible and intangible assets. Among other choices, the following can be considered like-kind properties of cargo and shipping containers:

  • Trailer parks
  • Golf Courses
  • Intellectual property
  • Farmland
  • Water and ditch rights
  • Mineral rights and royalties
  • And many more

Trailers and Shipping Containers 1031 Exchange Timeline

When the deed of sale has been completed, a taxpayer’s eligibility for a 1031 exchange begins. In order to remain active, shipping container sellers must identify at least one reasonable replacement asset within 45 days of the sale. The taxpayer can then submit up to two more properties for approval, regardless of their value within the full 180-day timeline for a valid 1031 exchange.

1031 Exchange Intermediaries for Selling Trailers and Containers

In order to meet deadlines and maximize their new investment, many busy taxpayers choose to utilize a 1031 exchange in the sale of cargo and shipping containers. Not only do intermediaries know the ropes for filing approved government paperwork, but specific industry connections may also allow open doors for wise reinvestments.

Why Purchase Mineral Rights and Royalties?

If you are evaluating new property options after the sale of cargo and shipping containers, then you may be overwhelmed when considering all of the options available. While unfamiliar territory may make you reluctant to test new investment waters, many successful investors know the strength of active mineral rights in a portfolio.
As a mineral rights owner, Americans have the opportunity to lease the subsurface of a given plot of land to an energy company. In the lease, mineral rights owners are compensated for their investment through a stream of mineral rights royalties. These royalty payments are typically delivered monthly, as a fixed percentage of resource sales defined in the lease agreement.

Around the world, it is very rare for property owners to be able to split their estate and sell or lease their personal mineral rights. In today’s world of increasing energy consumption, mineral rights are very valuable for the ongoing demand of the earth’s natural resources.

Conclusion

In the third decade of the 21st century, shipping containers are one of the most surprisingly valuable assets for a large number of industries. If you choose to sell when the time is right, considering a 1031 exchange may be a very valuable decision for long-term financial health and security. When considering new investments, mineral rights and royalties are an excellent way to secure a hands-off property designed to generate passive income.

Living out in the country is a breath of fresh air for most people. For others, hanging up the cowboy hat and heading to the city or the coast may be the ultimate choice in order to enjoy life to the fullest. For farmers and ranchers alike, selling the property is a big step, no matter what the next step might be.

If you decide to sell your ranch, then you may be eligible for a 1031 exchange, so long as the sale does not include your primary residence. For ranchers with multiple properties, 1031 exchanges help taxpayers retain as much of their capital as possible when it comes time to sell, by “trading up” for a new personal property.

In this article, we will outline the entire 1031 exchange process, beginning with the sale of a ranch. With this, we will present mineral rights as one of the most important things to consider when identifying new properties to purchase within the exchange.

How to Sell A Ranch

First things first, let’s sell your ranch. For those that are not aware, ranches are large plots of land for raising cattle and other livestock, typically found in western North America. While a farm is used to grow agricultural crops, ranches are primarily used for producing meat, dairy, and other animal products. In some cases, ranches and farms are simultaneous if the property is dedicated to multiple disciplines. Today, ranches also offer many services beyond their exports including horseback riding, accommodation, event hosting, and more.

Ranches can be sold on the open market, just like any other personal property. While many ranchers start with a simple sign in their front yard, there are also a number of different marketing methods that can be used to locate a buyer. Today, ranches are typically sold in online auctions with the help of a broker or industry-specific real estate agent.

Determining the Value of Ranches

Even if you are planning to use an agent in the sale of your property, it is generally a good idea to have an approximate estimate of your ranch’s value. A ranch is essentially just a sum of its parts, which add up together to make the property’s total value. In order to begin to get an idea of your ranch’s value, it’s good to make a list of its features including:

  • Acreage
  • Land condition
  • Number of existing structures and condition
  • Whether or not livestock is part of the package
  • Included water or mineral rights
  • Zoning elements
  • And more

In truth, the actual value of a ranch is only going to be as much as a buyer is willing to pay. In booming areas of the United States, land for continued ranching or otherwise repurposing can be extremely valuable when considering the potential development onsite.

Ranches can be sold with or without present livestock, which can add a significant amount of value to the sale in question. Before putting a price on your ranch, it is always a good idea to check local listings of similar properties in order to gather information on current market conditions.

Taxes Paid on Selling Ranches

In most parts of the United States, ranches of all shapes and sizes sell for hundreds of thousands of dollars, and often even more. Not only are ranches used as homes, second homes, and country getaways, but they can also be used to start a business and begin earning revenue. If your ranch is not your primary home, the sale of it generally warrants:

  • Federal Income Taxes
  • Capital Gains Taxes
  • Sales Taxes
  • Local Taxes
  • And More

Unfortunately, ranch sales are subject to considerable taxation, at rates up to over 40% of the sale price. While most of this is unavoidable, capital gains taxes can be deferred by taxpayers who choose to purchase a new property in a 1031 exchange.

Selling Ranches with a 1031 Exchange

Under the IRS code for a 1031 exchange, the rules are laid out simply so that investors can avoid capital gains taxes otherwise associated with the liquidation of their assets. When purchasing a new property of equivalent or greater value, investors can “trade” their ranch for a new asset, and avoid paying capital gains taxes entirely. In a similar vein, new assets of a lesser total value can be purchased to avoid a partial amount of the capital gains tax.

Ranches Like-Kind Properties

In order for a 1031 exchange to truly be complete, taxpayers must acquire a like-kind asset after the sale of a ranch. Ranches are one of the highest valued kinds of personal property on the market today, so exchanging for a new, more expensive asset may actually be a bit difficult. However, if you don’t need the cash immediately, the following properties can be considered as “like-kind” for ranches:

  • Farms and farmland
  • Apartment buildings
  • Condos
  • Vacation rentals
  • Shops and malls
  • Mineral rights and royalties
  • And more

Ranches 1031 Exchange Timeline

1031 exchanges have a purchasing period of 180 days. This means that as soon as your ranch is sold, you have approximately 6 months to replace it with a new asset and follow the proper paperwork with the IRS. While this may seem like a long period of time, it is important to note that taxpayers are required to identify at least one new, potential property within 45 days of the sale.

Why Purchase Mineral Rights and Royalties?

In the United States, investors can buy and sell mineral rights, regardless of the surface rights of a property. In this split estate model, mineral rights owners are able to enter into oil and gas lease agreements with companies interested in extracting and selling any natural resources found on the property. With this, monthly oil and gas royalty checks are paid to mineral rights owners if the operation goes as planned.

Conclusion

In conclusion, ranches can be sold for a large amount of money, more of which can be retained with a 1031 exchange. When considering a 1031 exchange, many busy investors find that working with a specialized 1031 exchange intermediary can save time and maximize the potential of a further investment of the capital.

For the past 20 years, the software has slowly risen. It becomes one of the highest valued industries in the world. There is a global potential and minimal starting costs. That’s why tech entrepreneurs everywhere have made millions of dollars with the development and deployment of software. Have you heard of 1031 Exchange Software?

Many choose to sell software as a service (SaaS). There is other free software like apps and online marketplaces that can sell advertisements for ongoing revenue streams. As a successful product on the market, software owners have the choice of maintaining their service. They can also sell the company that the software supports.

When choosing to sell, the software can yield enormous cash flows for the purchase of cutting-edge or popular technologies. With this, considerable taxation is usually applicable, some of which are avoidable with a 1031 exchange.

In this article, we will explain how to 1031 exchange software. With this, we will explore like-kind properties such as mineral rights and royalties for maximum returns on the software sale.

How to Sell Software

Before you can 1031 exchange software, you will first need to sell it. There are hundreds of thousands of jobs for software sales in the United States. Most of these are based around user acquisition. Are you the owner of a piece of software or a builder of it? Then you have every right to sell your intellectual property, hardware, userbase, and more in a full transfer of ownership.

Depending on the quality of your product, it is generally not difficult to find buyers. In fact, many software developers in the startup universe simply built products just to sell them for enormous profits at later dates. If your “company” is nothing more than some of the best code ever written, then you will likely be selling simply the software’s “IP” in the event that there are no employees or pieces of hardware necessary to maintain the program.

Determining the Value of Software

Software and software companies are constantly being sold on the open market at an immense range of valuations. National and local headlines in tech industry blogs often cover software sales, so it is relatively easy to estimate the approximate worth of your software ware. Of course, the value of software is largely intangible, with an enormous focus being put on the software’s potential, rather than its current condition.

The following attributes should be considered when determining the value of software:

  • Current availability (on-market or off-market)
  • Number of users (if applicable)
  • Software cash flow (current and future projects)
  • Potential revenue streams
  • Integration with purchasing entities systems and IP
  • And more

Taxes Paid on Selling Software

Although many will tell you that they’ve been burst by the dot com bubble one too many times, software sales continue to earn developers large amounts of money every year in the United States. If done legally, software sales are subject to significant taxation from the local and national governments. For big sales, capital gains taxes are applicable at rates as high as 20% of the transaction value.

How to 1031 Exchange Software

A 1031 exchange of software is an IRS-designated transaction. It allows taxpayers to defer up to 100% of the capital gains taxes applied to the sale. In order to eliminate every dollar of the capital gains tax, sellers must acquire a new asset of equivalent or greater value in order to 1031 exchange software. Here, the 1031 exchange essentially allows individuals to “trade up” their software for a new property.

Of course, if you sold your software at such a high price that you never have to work another day in your life, it is possible to acquire an asset at a lower valuation. With this, partial capital gains taxes can be deferred.

Software Like-Kind Properties

Software and software companies are largely intangible. The IRS views its IP as simple personal property. Just like most of the things that they can buy and sell on the open market. Under the 1031 exchange code, software sales must be followed by purchases of “like-kind” property for a valid transaction and tax deferment. Like-kind properties for software or software companies may include:

  • Collectibles (cars, toys, etc.)
  • Boats
  • Vacation Rentals
  • Convenience Stores
  • Trailer Parks
  • Water and Ditch Rights
  • Mineral Rights and Royalties
  • And more

Timeline For a 1031 Software Exchange

From the exact day of the sale, sellers have 45 days to identify at least one reasonable property to purchase in a 1031 software exchange to remain eligible for the transaction. Up to two more properties are considerable regardless of their value, and purchase must be within 180 days of the sale.

For additional requirements, please see our 1031 Exchange Rules and Requirements Page.

Using an Intermediary to 1031 Exchange Software

It has become increasingly common for investors to utilize specialized 1031 exchange intermediaries when selling high-value software. With an intermediary, it can be much easier to handle all negotiations, paperwork, and exploration for new properties in a 1031 exchange.

What’s the Best 1031 Exchange For a Software?

If you are about to 1031 exchange software, you’ll find a wide variety of new assets to choose from. Although options are limitless for personal assets in the United States, mineral rights are one of the best properties to acquire in a 1031 exchange. As a largely hands-off asset, mineral rights entitle you to the ownership of the natural resources found below the surface of the earth in a designated area.

As a mineral rights owner, oil and gas companies can lease your land to extract and sell valuable resources on the open market. In exchange, you will receive mineral royalty checks as outlined in your mineral rights lease agreement.

Conclusion

When it comes time to sell your software, you can be in for a large influx of cash if your product is worth it. Although it is tempting to go overboard with celebrations, a reinvestment of your capital with a 1031 exchange can not only save you money on the sale of software but also generate a future stream of income.

What’s in a name? Sometimes everything. If you or your company has a valuable trademark, then it can likely be sold for a tremendous amount of capital. While trademarks and intellectual property sales are generally a smaller part of a larger merger, sales with large bottom lines are often an attractive choice after building a successful brand.
When it comes time to sell your trademark or intellectual property (IP), hefty transactions are often lessened by local and federal taxes. In the United States, capital gains taxes can be deferred on the sale of trademarks or IP with the use of a 1031 exchange.

In this article, we will detail the steps required for selling trademarks and intellectual property when utilizing a 1031 exchange. As the acquirement of a new asset is necessary, we will also demonstrate how mineral rights can be an attractive option for new capital investment.

How to Sell Trademarks and Intellectual Property

Do you remember the process of creating your trademark? The eventual sale of intellectual property will actually resemble it in a lot of different ways. Once you’ve found a buyer, trademark, and intellectual property sellers are required to notify the U.S. Patent and Trademark Office (USPTO) and file the necessary paperwork to transfer ownership.

More often than not, the sale of a trademark or IP is the result of a buyer finding a seller, rather than the other way around. With that said, if you are interested in selling your trademark, there are a few designated online listing sites available that act as a virtual IP marketplace. Beyond this, word of mouth and industry outreach are other popular ways to sell potentially valuable trademarks to relevant buyers.

Determining the Value of Trademarks and Intellectual Property

Although they are intangible, trademarks and intellectual property can be extremely valuable to their owners. Prices are completely up to the discretion of the seller, and IP sales generally come after several negotiations.

The actual value of any kind of intellectual property is truly only determined by a price that a buyer is willing to pay. Trademarks and IP are usually purchased with future cash flows in mind as a result of the acquisition of the property.

Taxes Paid on Selling Trademarks and Intellectual Property

High ticket trademarks and intellectual property can be taxed at rates up to 40% in some areas of the United States. This sizable chunk of the sale price can be accounted for through the following taxations:

  • Federal Income Taxes
  • Capital Gains Taxes
  • Sales Taxes
  • Local Taxes
  • And More

While most of these payments cannot be avoided, investors in the United States have the unique opportunity to defer all or some of the capital gains taxes paid on the sale of trademarks and intellectual property. To do so, taxpayers must purchase a new property to “replace” the trademarks or IP through a 1031 exchange.

Selling Trademarks and Intellectual Property with a 1031 Exchange

In a 1031 exchange, trademarks, copyrights, and IP can be sold free of capital gains taxes with the purchase of an asset of equal or greater value. If taxpayers choose to purchase a new asset of lesser value than their sold IP, then it is possible to defer only some of the capital gains taxes that would otherwise be paid in the year of the sale. With rates up to 20% for some individuals, 1031 exchanges are one of the most popular tax-saving strategies in the US.

Trademarks and Intellectual Property Like-Kind Properties

At the heart of a 1031 exchange, it is essentially a legal way to “trade” your IP for another asset to maximize your wealth. In the United States, the IRS will typically allow most reasonable personal property acquisitions to qualify for a 1031 exchange with the sale of trademarks, copyrights, patents, and IP. Most commonly, taxpayers can purchase:

  • Land
  • Businesses
  • Farms
  • Art Work
  • Apartment Buildings
  • Mineral Rights and Royalties
  • And more

Trademarks and Intellectual Property 1031 Exchange Timeline

By law, taxpayers using a 1031 exchange have 180 days to purchase a new asset after an intellectual property sale. This equates to roughly 6 months. From the date of the sale, it is required that sellers identify at least one reasonable property that can be considered for purchase. This does not need to be the actual asset required, as sellers can identify up to three potential assets for consideration, regardless of their value.

1031 Exchange Intermediaries for Selling Trademarks and Intellectual Property

With paperwork, deadlines, and new properties to consider, most busy investors choose to utilize a 1031 exchange intermediary when selling trademarks, copyrights, and IP. Specialized 1031 exchange intermediaries are very valuable resources for ensuring the successful completion of the transaction with maximum return on investment potential.

Why Purchase Mineral Rights and Royalties?

When considering new assets after the sale of trademarks and IP, it may be difficult to know where to start. In the United States, investors have the unique opportunity to purchase mineral rights, which can be leased to oil and gas companies for the exploration and sale of natural resources.

As a mineral rights owner, successful energy operations entitle you to monthly mineral royalty payments. Royalty payments, also known simply as royalties, typically come in the form of a fixed percentage of operational profits, as defined in an oil and gas lease agreement.

Conclusion

In conclusion, mineral rights and royalties should strongly be considered when selling trademarks, intellectual property, or copyrights in a 1031 exchange. By avoiding capital gains taxes and earning future mineral royalties, taxpayers can maximize their IP sales with a smart reinvestment of capital. For this reason, we strongly recommend working with 1031 exchange intermediaries with exceptional knowledge in the mineral rights industry.

With a fee simple interest, you have it all. In the United States, a fee simple interest contract designates the highest level of private property ownership. This is a single party that owns the land. This includes everyone on it, under it, or above it. With that, be ready to learn about 1031 exchange fees today!

Do you own your home in the United States? Then there is a large chance that you own your property in a fee simple interest agreement. This is also recognizable simply as a “fee simple” or “fee simple estate”. Whatever you call it, this absolute ownership of property has limitations by local HOAs or zoning laws.

When it comes time to sell your fee simple interest, hefty taxations are avoidable. This is with a 1031 exchange if the property is not your primary residence. How about for second homes, abandoned lots, forest land, and more? Fee simple interests can be exchangeable for new properties. It will be completely void of capital gains tax otherwise payable.

In this article, we will break down the process. Mainly of using a 1031 exchange in the sale of a fee simple interest. Is it time to identify a new property in the exchange? With that, we will explain how mineral rights can be a wise investment for Americans. Are you looking to earn a steady stream of oil and gas royalties? Read more now.

How to Sell Your Fee Simple Interests

If the property is your primary residence, a fee simple interest is not useable in a 1031 exchange. Beyond this, there are little to no restrictions on selling fee simple interests, only typically bound by geographic restrictions. Fee simple interests (or similar ownership structures) in foreign countries can are sellable in the United States. This is all done with a 1031 exchange.

With this in mind, there are essentially an infinite amount of ways to sell a fee with simple interest. Usually to another person or larger private and public entities. Online auctions and digital listings are now considered to be the primary avenue. This is for easy and legitimate private fee simple interest sales.

Determining the Value of Your Fee Simple Interests

In many cases, the value of a fee simple interest is an afterthought. The exchange is incredibly common. Still, not many people consider the fact that they own their property’s subsurface or limited airways. To determine the value of a fee simple interest is simply to assess the value of the property and surface rights. This is applicable in most residential situations. Of course, you need to follow a 1031 exchange law along the valuation.

It is likely that there are many personal properties like it for sale on the market today. This is no matter the category of property your fee simple interest falls into. Because of this, it is very easy to evaluate the approximate worth of your fee simple interest. This is by finding similar properties based on the following criteria:

  • Land size
  • Local market trends
  • Number of buildings and condition
  • Historic valuations and improvements
  • Mineral rights potential
  • Rezoning possibilities
  • And more

Taxes Paid on the Selling 1031 Exchange Fees Simple Interests

The sale of a fee simple interest often occurs a large amount of taxation from federal and local governments. The truth is that high price tag sales can have capital gains taxes at rates up to 20%. For this reason alone, 1031 exchanges are extremely popular with investors. Especially those looking to defer as much taxation as possible on the sale of a fee simple interest.

Selling Fee Simple Interests with a 1031 Exchange

In a 1031 exchange, you are not selling fee simple interests so much as you are “trading” them for a new property. 1031 exchanges are inclusive of two individual private property sales transactions. There is a link between this transaction by a few governmental documents.

If the new property is of equal or greater value than the sold fee simple interest, then all capital gains taxes can be deferred, no matter the rate at which they were applied. New properties of lower value can also be purchased in a 1031 exchange, although only a portion of the taxes is then withheld.

1031 Exchange Fees Simple Interests Like-Kind Properties

Fee simple interests come in all shapes and sizes, so the IRS allows essentially any personal property (tangible or intangible) to be purchasable in a 1031 exchange, capital gains tax-free. In the United States, fee simple properties can be exchanged for:

  • Commercial buildings
  • Rental Properties
  • Farmland
  • Collectibles
  • Mineral Rights and Royalties
  • And much more

Fee Simple Interests 1031 Exchange Timeline

After you sell your fee simple interest, then you must identify at least one eligible property for a 1031 exchange within 45 days of the sale. This does not necessarily need to be the one purchased, but a new asset must be secured within 180 days in order to qualify for a valid 1031 exchange.

1031 Exchange Intermediaries for Selling A Fee Simple Interests

Although we are just scratching the surface here, fee simple interests require a significant amount of time, attention, and paperwork for a successful reinvestment of your wealth. It is advised to seek professional help if 1031 exchanges are new investment territory.

1031 Exchange Partnership Interest Restriction

Partnerships take many forms. There are general partnerships, limited partnerships, joint ventures, joint tenancy, Corporations, LLCs, etc. The IRS recognizes a partnership as a single entity, a single person. This “person” may exchange real estate, but the individuals who make up the partnership may not exchange their individual shares. This creates a problem when one or more persons wish to break out of the partnership and go on their own without paying capital gains tax. The only exception to this restriction is if ownership is in tenancy-in-common (TIC). The IRS will consider that each owner holds the equivalent of a separate piece of real estate. They can trade that piece for another property of their own.

Many investors are in a partnership or wish to enter the one that already exists. If their partnership is not a TIC, it may be possible to convert. General partnerships and joint ventures are convertible with little problem. Partnerships with limitations, corporations, and the like are not usually convertible.

The conversion of the partnership to TIC allows the investor to accomplish the desired exchange. There are two basic solutions to navigate, each with its own benefits and pitfalls.

Why Purchase Mineral Rights and Royalties?

Although you can choose to purchase nearly anything on this planet after selling a fee simple interest, mineral rights are a great opportunity for a strong reinvestment. By purchasing the subsurface rights of a portion of land, your mineral rights can pave the way for a steady flow of oil and gas royalties in a successful oil and gas lease.

While mineral rights are already a part of a fee simple interest, they can also be bought and sold independently in a split estate. Mineral rights in a city are far less valuable than mineral rights in a known oil and gas exploration area. For the best-case scenario, selling a fee simple interest for profitable mineral rights is done with the help of a specialized 1031 exchange intermediary.

A 1031 exchange specialist will be able to assist you with all the processes.

If you have further inquiries about 1031 exchange fees, feel free to reach out to Ranger Land and Minerals.

Owning mitigation credits is an incredible way to diversify your wealth for a worthy cause. Mitigation banking helps keep our country’s wetlands and healthy and abundant. Whether your mitigation credit has significantly raised in value, or you are simply not in it for the money, they can be sold or traded for other personal assets.

In the United States, taxpayers have the opportunity to utilize a 1031 exchange in the sale mitigation credits. In doing so, capital gains tax that would have otherwise been applied is withheld, so long as taxpayers invest in a new like-kind asset.

While money can essentially be placed anywhere, if your dream to restore a wetland area has been surpassed by the desire to earn more income, you may want to explore the option of investing in mineral rights. With a 1031 exchange, migration credits can be sold at the highest legal profit margins, while reinvesting in long term mineral royalties. In this article, we will break down the process step by step to answer questions and help you get started.

How to Sell Your Mitigation Credits

Although it requires a significant amount of time and effort, it is generally fairly easy to sell mitigation credits in the United States. In fact, if you are considering reinvesting mitigation credits into the oil and gas industry, these companies may actually be your target market.

Extraction of the earth’s natural resources requires mitigation rights, so oil and gas companies are often willing to pay a large lump sum for the opportunity to explore what was otherwise protected territory.

Determining the Value of Your Mitigation Credits

As more and more of the resources in the United States are depleted, mitigation credits have actually been rising in value steadily since their introduction on the market. With serious improvements to land and water systems, the value of a mitigation credit can double or triple its value in a short period of time.

While selling to an oil and gas company is an option, mitigation credits can also be sold to other private investors that want to continue the site’s restoration and conservation efforts. If this is the case, values can range dramatically based on:

  • Percentage ownership
  • Habitat acreage
  • Project age
  • Intended uses
  • Location
  • And more

Taxes Paid on the Sale of Mitigation Credits

If you make a considerable amount of cash from mitigation banking, sales from mitigation credits must be reported on your personal income tax each year. On top of this, capital gains taxes may be applied if the gain is significant enough. As mentioned above, capital gains taxes can be deferred using a 1031 exchange.

Selling Mitigation Credits with a 1031 Exchange

A 1031 exchange essentially allows American taxpayers to “trade” their assets for one another without having to pay for capital gains taxes that would have been applied. If the new asset is of less value then the mitigation credits, than it is possible for only some of the capital gains taxes to be deferred. For this reason, many investors see 1031 exchanges as a chance to reinvest in a more valuable or cash flow positive asset.

Mitigation Credits Like-Kind Properties

By definition, mitigation credits are not considered to be tangible personal property. For this reason, they can be exchanged for other intangible assets such as:

  • Mineral rights and royalties
  • Intellectual property
  • And water and ditch rights.

Beyond this, the IRS is typically lenient when it comes to the true definition of “like-kind” properties. In fact, mitigation credits can be used to purchase many physical assets including:

  • Farms
  • Apartment buildings
  • Malls and retail shops
  • Condos
  • And more

Mitigation Credits 1031 Exchange Timeline

As soon as a mitigation credit is sold, a taxpayer’s eligibility for a 1031 exchange begins. In total, the investor must purchase a new asset within 180 days of the sale, after identifying at least one potential property within 45 days. In total, 3 properties can be identified for consideration in a 1031 exchange, regardless of their value.

1031 Exchange Intermediaries for Selling A Mitigation Credits

With strict deadlines, fine print, and a whole lot to consider, 1031 exchanges are best completed with the help of an intermediary. Having a legal representative on your side will not only streamline the process of the exchange, but may also be able to help in the identification of a new asset. If you are considering selling your mitigation credits to an oil and gas company, then it is strongly recommended to work with an experienced oil and gas industry 1031 exchange intermediary.

Why Purchase Mineral Rights and Royalties?

If you own mitigation credits or have been interested in mitigation banking for a while, then you are probably well aware of what mineral rights are and how they work. For those new to the idea, mineral rights represent the ownership of the subsurface of a property.

Although mineral rights are not available in many countries throughout the world, Americans have the opportunity to sell or lease mineral rights for a tremendous financial gain. If valuable natural resources are found on the property, many extraction companies may be interested in working with a mineral rights owner.

In a mineral rights lease, mineral rights owners are entitled to a fixed percentage of the profits on resources sales forms the property. Here, it is crucial to negotiate and maximize your mineral rights share so as to earn the most money in your future royalty payments.

Conclusion

In conclusion, the endurance of mitigation banking has provided many mitigation credit owners the opportunity to sell their shares and earn a tremendous amount of income. In the United States, smart reinvestment with a 1031 exchange, enables taxpayers to keep more of their money while reorganizing their wealth. Today, there are few and far better investments than mineral rights.

Foreign property is exciting to purchase, but can often be excruciating to sell. Depending on the country in which you’ve invested, you may be seeing a huge developmental gain. You may also see a staggering financial loss if the time has come to sell your foreign property. That’s why knowing all about the right process on 1031 exchange properties for sale, specially for foreign properties, is important

Land and buildings in areas outside of the United States are subject to the laws of their native country. Are you a taxpayer in the US? If yes then the sale of your foreign property will also accumulate hefty regulation. It also includes taxation on your income.

With this in mind, what will happen? Double taxation will quickly eat away at your chances of turning a profit on your international investment. To mitigate this, capital gains taxes are often deferral by way of a 1031 exchange. This requires former property owners to “trade” their sold property for new, similar investments.

In this article, we will outline the steps necessary to 1031 exchange foreign property. Moreover, we will eliminate capital gains taxes. With this, we will also showcase the strength of mineral rights and other profitable investments. These are the new properties under a selection of a 1031 exchange of foreign property.

How to Sell Your Foreign Property

Before you can 1031 exchange a foreign property, you will first need to sell it. Selling is typically through an intermediary unless the property is the seller’s personal residence. In this case, it is sellable directly from the owner. Real estate practices, systems, and laws are different in every country around the world. Basically, sellers must be aware of all of the regulations pertaining to the sale of their property.

Determining the Value of Your Foreign Property

Somewhat obviously, the value of your foreign property is going to be under approval by a myriad of factors. This will usually differ in location. Are there no improvements in your property? If none, then it will likely be sellable at a similar value as to when it was purchased. Are choosing to sell your foreign property by yourself? Then it is important to check the current market conditions in your area and adjust the price accordingly.

With the sale of foreign property, sellers must also consider the current exchange rate for local currencies back to USD. Everything on US taxes must be in US currency. With that, any gains on foreign property sales must be as so. Large differences in exchange rates may be responsible for net loss or gain on a property.

Taxes Paid on the Selling Foreign Property

Whenever a foreign property is sold by a US taxpayer, they will pay the IRS an amount of money. The common term is as an “ex-pat tax,”. This is the sum of a few different plausible taxations. In the event of a foreign property sale, the net loss or gain of the sale must be reported. This is within Section D on that year’s income tax return. From there, losses cannot be written off, whereas gains are subject to taxation from federal, state, and capital gains taxes.

Gains up to $250,000 can actually be under exclusion from domestic taxation from the sale of foreign property abroad. Here, foreign properties that served as a taxpayer’s primary residence for at least 2 of the last 5 years. These are eligible for gains exclusions on property tax.

How to 1031 Exchange Foreign Property

If the net gain on your foreign property sale is large enough, then it will likely be subject to capital gains taxes in the sale’s calendar year. In the United States, the IRS has granted the unique opportunity to “trade” foreign properties in a 1031 exchange in order to defer capital gains taxes. Even if the taxation isn’t significant, utilizing a 1031 foreign property exchange in order to maximize property sales with new, cash-positive assets, will be well worth it.

Foreign Property Like-Kind Properties

Whenever a foreign property is 1031 exchanged, it must be “replaced” with a new, similar, or “like-kind” property. While you may be selling land, buildings, or other high-ticket items overseas, personal property sales can be exchanged for many different kinds of assets in the United States. So long as you are selling a home, a building, or your foreign property, 1031 exchange can mitigate capital gains taxes if you purchase:

  • Another physical property (in the US or abroad)
  • Collectibles and artwork
  • Conservation easements
  • Mineral rights and royalties
  • And more

Timeline For a 1031 Foreign Property Exchange

Once the property is sold, taxpayers then have to identify one new property within 45 days if they would like to remain eligible for the 1031 foreign property exchange. This does not necessarily need to be the purchased property, and two other potential assets can be properly identified, regardless of their value. If no new properties are purchased within 180 days of the sale, then the foreign property seller is no longer eligible for a 1031 exchange.

For additional requirements, please see our 1031 Exchange Rules and Requirements Page.

Using an Intermediary to 1031 Exchange Foreign Property

Due to the complexities of undergoing a 1031 foreign property exchange, most investors typically choose to use a specialty 1031 intermediary for the sale of property in relation to domestic taxation. In some cases, intermediaries are also able to help identify new properties that are best suited for the investor’s budget and goals.

What’s the Best 1031 Exchange For a Foreign Property?

Taxpayers are free to choose from a wide variety of new assets after the sale of a foreign property. But unlike in most countries around the world, United States property owners have the unique opportunity to 1031 exchange foreign property into mineral rights. With mineral rights, the subsurface of a property is lapsable or sellable to oil and gas companies hoping to explore and extract minerals from the land. When these natural resources are under sale, mineral rights owners have the entitlement to mineral royalties, which come in the form of a monthly payment from the operation’s profits.

If your foreign property is not your primary residence then it will likely be necessary that capital gains taxes are payable. So long as you are not in the need of house hunting, mineral rights, and royalties service as the perfect reinvestment of wealth for the 1031 exchange of a foreign property. They are often hands-off investments with the potential for large streams of future royalty payments.

Do you have 1031 Exchange Properties for sale? Feel free to reach out to us here and we will assist you further.

Owning your own vacation home can be a paradise. This is true for those fortunate enough to invest in a second home or apartment. A second home provides a great source of income. Moreover, you can enjoy any time of the year when guests are not around.

Of course, if the right opportunity comes, selling a vacation property can be an attractive idea. This is true especially for a quick lump sum of cash. A large sale is a great way to diversify your wealth once the allure of frequent getaways has worn off. This is when weighed against the ongoing maintenance, marketing, and upkeep of a leased second home.

Unfortunately, with a large sum of cash transferable to personal income, vacation home sales often lead to excessive taxation from the IRS. High-value vacation rentals are subject to capital gains taxes, which are deferrable in a simple 1031 exchange.

Vacation homes are one of the most common and useable assets in 1031 exchanges. Many wealthy investors use the opportunity to “trade up” for new property tax-free. In this article, we will outline the steps necessary to 1031 exchange second home or other vacation property and avoid capital gains tax and maximize profit.

How to Sell A Second Home

Before you can 1031 exchange vacation home, you will first need to sell it. Do you own your second home for a while? Chances are that you’ve had your fair share of offers from guests after their week in paradise. Whether or not you should take these handshake deals, is all up to you. Know that the 1031 exchange is a much better way of selling your vacation property in the 21st century.

Determining the Value of A Vacation Home

With rapid acceleration in condensed areas, a second home can bring a tremendous gain in the right areas of the country. Conversely, natural disasters, poor upkeep, or depleting local economies unfortunately often land vacation property sellers with less than what they paid for originally.

If you plan to list your vacation home yourself or would like to get a ballpark idea of its value before speaking with a broker, one must consider the following factors to determine the value of a vacation home:

  • Size of home
  • Condition and upkeep
  • Current leasing price and rental history
  • Community amenities
  • Staffed or contracted services onsite

In popular vacation destinations, there are many similar vacation rentals within close proximity to one another. If you are selling in a dense area, the easiest way to get an idea of your second home’s value is to look at local listings for buildings and land that share similar characteristics with your vacation home.

Taxes Paid on the Selling Second Home

Unlike in the sale of a personal residence, vacation homes that are considerable as a business or second home are subject to capital gains taxes in the event of a sale. Capital gains taxes can be as high as 20% on expense vacation homes, in addition to the federal, local, and sales taxes that are also applicable to the bill of sale. With every dollar adding up, many investors choose to defer capital gains taxes on sales through a 1031 second home exchange.

How to 1031 Exchange Vacation Home

In a 1031 exchange, vacation home sellers must purchase a new asset “in exchange” for their old property. If the new property is of equal or greater value, then taxpayers through the 1031 exchange have the opportunity to defer every dollar of capital gains taxes. In the same vein, lower-value assets are purchasable for a partial omittance of capital gains taxes.

Vacation Home Like-Kind Properties

Vacation homes are some of the most common assets in 1031 exchanges. Sales of second homes are subject to taxation, but capital gains taxes are completely avoidable with the proper paperwork and the purchase of a new “like-kind” asset. In a 1031 exchange vacation home can be exchanged for many like-kind assets, including:

  • Apartment Buildings
  • Trailer Parks
  • Convenience Stores
  • Golf Courses
  • Farms
  • Water and Ditch Rights
  • Mineral Rights and Royalties
  • And more

Timeline For a 1031 Second Home Exchange

Once you sell your second home, you have exactly 180 days (or about six months) to purchase a new property for a valid 1031 exchange of the second home. If filed correctly, taxpayers will completely defer capital gains taxes in the year of which the exchange was completed. Additionally, it is important to note that one “reasonable” property must be identified within 45 days of a vacation home sale for the taxpayer to remain eligible for the 1031 exchange.

For additional requirements, please see our 1031 Exchange Rules and Requirements Page.

Using an Intermediary to 1031 Exchange Second Home

For most, the process of filing governmental paperwork and meeting strict deadlines can be daunting in an already busy life. Because of this, many sellers will choose to work with an intermediary in order to 1031 exchange vacation homes smoothly and make sure the reinvestment is maximized when identifying the new asset for the 1031 exchange.

What’s the Best 1031 Exchange For a Vacation Home?

Although taxpayers are free to 1031 exchange second homes for a wide variety of new properties, mineral rights offer a unique opportunity for investors looking to maximize their wealth. In the United States, mineral rights can be leased to oil and gas companies to explore, extract, and sell natural resources from the subsurface of a property. In doing so, mineral rights owners earn oil and gas royalties as a fixed percentage from the monthly operations.

Conclusion

Had years and years of vacations? Do you feel it’s time to sell your vacation home? 1031 exchange is one of the best decisions that can be made. Are you seeking an income stream that is a bit more passive than maintaining a second home? Mineral rights are one of the best new properties that can be purchased income tax-free in a 1031 exchange. Reach out to us here.

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In the United States, conservation easements allow private investors and entities to take control of a parcel of land to maintain or improve the land. Across the country, conservation easements have been set up and purchased by sustainability-conscious investors to improve water quality, perpetuate the growth of forests, protect wildlife habitats, and more.

Owning conservation easements is a bit different in each state, with significant tax reductions and exclusions in different parts of the country, which leads to many investors purchasing conservation easements as a tax shelter. In many cases, these tax shelters are proven to be less legitimate; the buyer does not put forth efforts towards the conservation of the land.

If you own a conservation easement, selling to a government body, enterprise, or private investor typically involves a large cash influx. With this, the loss of tax reductions is met with significant taxation on the price of the sale. One of the best ways to recoup losses from the sale of conservation easements is to utilize a 1031 exchange to trade the property for another asset.

In this article, we will outline how to sell a conservation easement in a 1031 exchange. In doing so, taxpayers can defer capital gains taxes by reinvesting in a new property such as mineral rights and royalties.

How to Sell Your Conservation Easements

As efforts to protect our country’s land is at an all-time high, it has never been easier for private and public buyers to find and purchase conservation easements. In many cases, individual purchases are made with the assistance of at least some local, state, or federal funding. Programs from Partners for a Clean Environment (PACE) and other organizations can drastically bring the appraised value of conservation easements down so that buyers can afford designated land.

Determining the Value of Your Conservation Easements

Conservation easements are typically reviewed by qualified appraisers in order to determine their market value. While some investors choose to donate their conservation easements for the tax benefits, a highly valued conservation easement can end in a large check written in the former landowners’ name. Appraisers typically look at the following factors in order to determine the market value of a conservation easement:

  • Property size (acreage)
  • Property features (water, forest, etc.)
  • Property history (new or established easement)
  • And more

In some cases, conservation easements may actually lower a property’s value. This is the primary reason why investors typically donate their conservation easements to farmers or landowners that can further financially benefit from the land.

Taxes Paid on the Selling Conservation Easements

If you choose to sell, rather than donate or bequeath your conservation easements, then you will be forced to pay a few different taxes based on your location. In regions across the United States, taxpayers may expect the following to be applied to the sale of conservation easements:

  • Capital Gains Taxes
  • Federal Income Taxes
  • Sales Taxes
  • Local Taxes
  • And More

Of course, experienced investors are well aware that the IRS offers a 1031 exchange to help taxpayers retain their wealth by deferring capital gains taxes. As capital gains taxes can reach rates as high as 20% on the sale of a conservation easement, purchasing a new property with a 1031 exchange is one of the most popular ways to maximize the earnings from an outright sale.

Selling Conservation Easements with a 1031 Exchange

With a 1031 exchange, capital gains taxes can be completely avoided if sellers choose to reinvest in a property that is of equal or greater value than the conservation easement. If the new property is of less value than your conservation easements, some capital gains taxes can be deferred.

As in most government procedures, 1031 exchanges used in the sale of conservation easements can be highly complicated endeavors with detailed paperwork and strict deadlines to meet. For this reason, most busy investors choose to work with a 1031 exchange intermediary when selling a conservation easement.

Conservation Easements Like-Kind Properties

The primary function of a 1031 exchange is to “trade” a conservation easement or other personal property for a new asset. The IRS designates that both properties in a 1031 exchange should be of “like-kind,” although the definition of this is somewhat loose. In most cases, investors and their accounting teams are able to justify most personal property types as like-kind to conservation easements. Today, these include:

  • Farmland
  • Vacant lots
  • Commercial buildings
  • Collectibles
  • Water and ditch rights
  • Mineral rights and royalties
  • And much more

Conservation Easements 1031 Exchange Timeline

As soon as you sell your conservation easement, your eligibility for a 1031 exchange begins. Within the first 45 days, all taxpayers using a 1031 exchange must identify at least one “reasonable” property that they may purchase to avoid capital gains taxes. This property does not necessarily have to be the one that is actually used in the exchange and investors have precisely 180 days (or about 6 months) to finalize the acquisition of the new asset.

Why Purchase Mineral Rights and Royalties?

To some environmentalists, mineral rights may seem like the opposite of conservation easements when looking at the individual assets in a portfolio. While most mineral rights are used to source and sell natural resources, they can also be purchased without the intent of extracting the land’s energy-producing substances. In this regard, mineral rights can actually be a logical purchase for those selling conservation easements.

On the other hand, today’s technology has made it easier and safer than ever for oil and gas companies to mine and sell the resources found below the earth’s surface. With a strong mineral rights lease, subsurface property owners can generate a consistent income stream as a fixed percentage of monthly oil and gas operation sales.

Conclusion

In conclusion, if you plan to sell your conservation easements, the best way to retain the most of your capital is through a 1031 exchange. With a specialized 1031 exchange intermediary, investors in the United States may be able to transform their conservation easements into a strong and profitable mineral rights portfolio.

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If you are fortunate enough to have a leasing portfolio, then it is most likely difficult to imagine getting rid of all of your assets. While most people associate leasing with land and buildings, high ticket leasing portfolios filled with cars, trucks, and equipment for people and professionals in all industries can be highly cash flow positive endeavors.
When it comes time to sell your cars, trucks, or equipment, huge portfolio adjustments from high volume sales often result in capital gains taxes being applied to asset sales. If your portfolio sale is large enough to warrant capital gains taxes, then a 1031 exchange can be utilized to alleviate expenses when reinvesting in new properties.

In this article, we will outline the steps to take when selling a portfolio and leveraging a 1031 exchange with the IRS. With this, we hope to bring a greater understanding of the benefits of using a 1031 exchange when selling a leasing portfolio, while outlining mineral rights and royalties as one of the best possible investments for your capital gains.

How to Sell Your Leasing Portfolio

Depending on its contents, there are many different ways to approach the sale of a complete leasing portfolio. In modern American industry, the following items are most commonly found in both personal and business leasing portfolios:

  • Cars
  • Trucks
  • Aircrafts
  • Boats and watercrafts
  • Power generators
  • Real Estate
  • Communication equipment
  • Manufacturing equipment
  • And much more

In the growing peer to peer economies of today’s marketplace, leasing has become more common than owning for many income and social groups. Chances are today, if you can buy it, then you can lease it. However, leasing is one of the quickest ways to place wear and tear on portfolio assets with the risk of your property losing its value.

When the time comes to sell, large leasing portfolios are often sold with the help of a professional facilitator that leverages connections and networks to find the right buyer. Whereas individual components may be sold one by one, the full outright sale of a complete leasing portfolio with the help of a broker is the easiest way to transform your wealth into a new direction.

Determining the Value of Your Leasing Portfolios

To sell your leasing portfolio, you must essentially just sum up the assets of which you are hoping to sell. Bundling works both for and against investors as a large quantity deal typically results in a high sale price, but a lower overall per-unit commission. Of course, the true value of a leasing portfolio is only determined by how much a person or business is willing to pay for the assets.

Leasing portfolios are valued by the following attributes:

  • Number of assets
  • Outstanding contracts
  • Maintenance history
  • Location of assets and transportation concerns
  • The expected lifetime of assets and leasing potential
  • And more.

Active leasing portfolios with up-to-date contract and maintenance records are the most likely to sell to new investors. More often than not, the amount of capital you will receive for your leasing portfolio is largely determined by when the new investor expects to recoup their purchase through asset leases.

Taxes Paid on the Selling Leasing Portfolios

While leasing has taxes of its own, when you decide it’s time to sell, large amounts of tax are generally paid on the sale of a leasing portfolio. For both private and public leasing companies, the following taxes can be expected:

  • Sales Taxes
  • Federal Income Taxes
  • Capital Gains Taxes
  • Local Taxes
  • And More

On top of these expenses, large leasing portfolios are commonly sold across international borders. With this, investors can be expected to pay regulatory and local taxes that vary between countries. For sales that remain in the United States, a 1031 exchange can be used to defer capital gains taxes.

Selling Leasing Portfolios with a 1031 Exchange

Experienced investors are usually well aware that 1031 exchanges can be used to defer taxes on the sale of a large asset, so long as the taxpayer reinvests in another property. With this, the “exchange” or “trade” can be completed without having to shell up a few bucks for Uncle Sam. If the new asset is valued less than the sale price of a leasing portfolio, it is possible to defer only some of the capital gains tax. However, most investors use 1031 exchanges as an opportunity to “trade up” for something more valuable.

Leasing Portfolios Like-Kind Properties

In a 1031 exchange, leasing portfolios can be traded for “like-kind” properties. Leasing portfolios are viewed as ordinary private property assets, and can therefore be exchanged for many high ticket properties. This includes:

  • Land
  • Farms
  • Apartment buildings
  • Retail stores
  • Water and ditch rights
  • Mineral rights and royalties
  • And much more

Leasing Portfolios 1031 Exchange Timeline

After you sell your leasing portfolio, then you have exactly 180 days to replace your asset with a new property in a valid 1031 exchange. Within these 6 months, at least one property must be identified in the first 45 days, and three total properties may be submitted for consideration to the IRS without having to incorporate their value.

Why Purchase Mineral Rights and Royalties?

While you can purchase almost anything after selling your leasing portfolio, we strongly recommend looking into the possibility of mineral rights and royalties. Here in the United States, mineral rights can be purchased and leased to oil and gas companies that extract and sell natural resources on the open market. As the mineral rights owner, you are then entitled to a steady stream of mineral royalties.

Clearly, mineral rights are not that much different than leasing portfolios with cars, trucks, or equipment. Here, mineral rights are also being leased, however, day-to-day operation is typically much less hands-on for mineral rights owners than in traditional leasing portfolios.

Conclusion

In conclusion, the sale of a leasing portfolio can be maximized by reinvesting the capital with a 1031 exchange. For a similar experience with a passive income stream, former leasing portfolio owners should explore the possibility of mineral rights as a great long-term investment.