In the context of a 1031 exchange, taxpayers want to be able to access the best investments possible. However, not all properties are readily available to the general public because the Securities and Exchange Commission (SEC) regulates what kind of properties can be advertised and marketed to the public.
Certain types of people (accredited investors) are deemed not to need the same level of protection as the average consumer. These people are thought to be more sophisticated and appropriate to market these types of securities to.
Who Qualifies as an Accredited Investor?
In order to be deemed an accredited investor, an individual must demonstrate that they have an annual income of at least $200,000 (or $300,000 if you’re married filing a joint tax return), or show that you have a net worth exceeding $1,000,000.
If you meet the threshold then you can be given access to securitized real estate Investments that allow you to roll your money into what are typically very low management, passive Investments that generate steady streams of income without your having to engage in the day-to-day management of the business.
Delaware Statutory Trusts & Tenancy-in-Common Syndications
These offerings (often referred to as Delaware Statutory Trusts or tenancy-in-common syndications) are very popular among older investors that are getting out of management-intensive property such as farms and apartment buildings, and are looking for a place to put their replacement property proceeds into that will allow them a steady stream of income and perhaps some leisure time to travel and enjoy life.
- 1031 Hotline: If you have questions about accredited investors and 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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