Last week we introduced depreciation and mentioned that a 1031 exchange could save you from the immediate cost of depreciation recapture. To fully understand depreciation, including how the year you purchased the property and various depreciation methods factor into your calculations, consult your tax advisor or IRS publication 946. Today, we'd like to look at some additional basics you should know.

It isn't fun to consider how your real estate properties have deteriorated as they face another year of use by tenants, harsh weather conditions, aging building materials, and other factors. However, when that deterioration results in tax deductions and increased cash flow, then maybe it isn't so bad. When it comes to accounting books and tax returns, this deterioration is known as depreciation.

The Internal Revenue Ruling 2004-86 names seven deadly sins that limit the Delaware Statutory Trust ("DST") trustee's power. Deadly sins can sound intimidating, and engaging in any one of these prohibited acts can have serious consequences for the DST and its beneficiaries.

DSTs Reduce TIC Drawbacks

During the 1990s and early 2000s, most 1031 exchange investors who exchanged properties for partial ownership in large, high-valued replacement properties participated in the Tenant-In-Common (TIC) structure.

1031 Crowdfunding, LLC announced today that on May 1, 2018, through joint venture with Seasons Management, LLC, it acquired a 48-bed memory care facility in Hillsboro, Oregon for a total purchase price of $14 million.