Malachowski And Associates

Call (415) 983-0717

 

Mark Malachowski and Associates Attorneys Lawyers Counsellors Trusts Wills Estate
Law Office of
Malachowski
& Associates


An Experienced Law Firm 
Dedicated to Your Success

Mark Malachowski
Attorney at Law
870 Market Street
Suite 1048
San Francisco, CA 94102

(415) 983-0717


 

Contact Us
Call (415) 983-0717, or use this form.

San Francisco Estate, Business, and Investor Immigration Law Blog

Prince’s Vault Robbed?

 

The rights to Prince's unreleased music sold for $30 million to Universal Music, but critics claim the collection went too cheap. Prince’s “vault,” a trove of the late pop star’s unreleased music, was sold at auction, but there was not much of a bidding war. The battle over Prince's Estate rages on.

BPI v ABC for $5.7 Billion for Fake News

 

Beef Products Inc. (BPI) a South Dakota meat processor's sued ABC in a $5.7 billion defamation lawsuit. The trial pits big agriculture against big media. Beef Products Inc. (BPI) claims ABC, a unit of Walt Disney, defamed the company by calling its ground-beef product “pink slime.”
ABC failed to get the case removed to federal court and dismissed in summary judgment. The case is being tried in Elk Point, South Dakota, population 2,000, about 20 miles north of BPI’s headquarters.

1031 Exchange Deadline

 

If you just sold real property and want to do a 1031 exchange to avoid capital gain, you are at the “now or never” stage to elect for funds to go to a 1031 Accommodator. Here is the deal in broad strokes:
(1) all tax basis will be allocated to the funds to be reinvested via 1031, so any funds taken as cash will be fully taxable at Federal capital gains and State ordinary income rates — a total approaching 25%, though perhaps the state taxes are a deduction against Federal taxes, which may bring the effective rate more into the 22% range.
(2) You will have a maximum of 45 days after escrow closes to “identify” potential replacement properties. You can identify a total of three or, alternatively, as many as he wants but the total value may not exceed 2X his 1031 funds with Accommodator. So, you could identify a few higher-value properties (a nice vineyard or office rental building) or many lower-value properties, such as rental homes in the San Joaquin Valley or maybe Idaho. It is called a “like-kind” exchange, but all real property is considered “like-kind” to all other as far as I know. You must keep in the money in the U.S. — no villas in Tuscany.
(3) You will have six months from when escrow closes to close on one or more “target” properties.
(4) If you want to leverage, you can add loan monies to the 1031 monies. The leveraging with mortgage money will serve to give you significant tax basis to depreciate, sheltering some money.
Thus, if you are looking at lots of capital gain tax and a 1031 could mitigate the hit, and you will probably invest the funds somewhere, so why not do so in real estate instead of losing 22% or more to the government?

 

Leveraging 1031 Monies

 

You leverage 1031 monies by adding loan monies to the 1031 monies. The leveraging with mortgage money will serve to give you significant tax basis to depreciate, sheltering some money.

Capital Gains on Property Sales

 

By using by a 1031 Exchange when you sell real property you can avoid a 25% capital gain tax by doing a 1031 Exchange. You will have a maximum of 45 days after escrow closes to “identify” potential replacement properties. You can identify a total of three or, alternatively, as many as   you want, but the total value may not exceed 2X your 1031 funds with Accommodator.

See Through Trusts

The advantages of using a trust as a designated beneficiary of an IRA (or creating a See Through Trust) are that they allow spendthrift, divorce, asset and bankruptcy protection. The trust or sub-trusts must be listed on the IRA beneficiary designation form.  The trust must be valid in California, and the beneficiaries must be individuals identifiable at the time of the Trustor’s passing. Care must be taken when considering beneficiaries of widely differing ages in the pool to ensure that benefits are distributed to allow maximum tax advantages.