Unlike other entity types, irrevocable trusts are subject to a (seemingly arbitrary) special rule: the trust must own $5 million of assets to be deemed “accredited,” even if all its beneficiaries are individually accredited. Beyond the accreditation requirement, most private-placement investments cannot be offered via a general solicitation. In other words, you must already know or be referred to a qualified securities representative to participate in most private placements. If you wait until the last minute (in a 1031 exchange) to seek assistance from a financial advisor, you may find yourself trapped by the unintended consequences of such consumer protection rules: plenty of offerings, but nobody who is legally allowed to help you invest, because they don’t have time to convert a stranger to a client. If you are considering a 1031 exchange in a trust (or any entity for that matter), seek early guidance from both a tax professional and a qualified financial representative. A little early education can go a long way in a 1031 exchange.
A LITTLE EARLY EDUCATION CAN GO A LONG WAY IN A 1031 EXCHANGE.
RICHARD D. GANN, JD Managing Partner 1031 Capital Solutions (800) 445-5908 1031CapitalSolutions.com
Richard (Rick) Gann is an attorney, licensed real-estate broker, and general securities principal specializing in 1031 exchange solutions and he is co-author of the book How to Retire from Being a Landlord.
Disclaimer : This is for informational purposes only, does not constitute individual investment advice, and should not be relied upon as tax or legal advice. Please consult the appropriate professional regarding your individual circumstance. The views of this material are those solely of the author and do not necessarily represent the views of the presenting party, nor their affiliates. There are material risks associated with investing in real estate securities and 1031 replacement properties, including liquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal. The content of this presentation is neither an offer to sell nor a solicitation of an offer to buy any security which can only be made by prospectus. Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services offered through Concorde Asset Management, LLC (CAM), an SEC-registered investment adviser. 1031 Capital Solutions is independent of CIS and CAM.
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