Property investors often mistakenly sell their investment property or business and wind up needing to pay Uncle Sam thousands of dollars in capital gains taxes. They may not be aware of the tax laws in effect that provide them with the opportunity to retain their capital gains taxes on the sale of their business or investment property.

This law defers (and can even eliminate the capital gains taxes) you would typically need to pay when selling business or investment property. The money that is made on the sale of your business or investment property, must also be used only to purchase another “like-kind”.

When you take advantage of the 1031 exchange laws, you can save a lot of money, thereby allowing you to leverage your equity by purchasing even more property (which may have not been possible without the added tax savings).

A benefit to many investors, the 1031 exchange law has the potential to save you a boat-load of money, and is worth the time an effort to put to use. To start reaping these financial rewards, you much follow some procedures first.

Be sure that you select qualified intermediary (A.K.A. “Q.I.”) with a solid track record and professional reputation. Dealing exclusively with doing 1031 exchanges, a Qualified Intermediary is an expert with the facilitation of such a deal.

Your Q.I. provides a written agreement to change the transfer from and outright sale to an “Exchange” then transfers your relinquished property (that you are selling) and takes that money and uses it to purchase your replacement property on your behalf.

To qualify for your exchange, you will need to follow these rules:

1. Firstly, the investment property that you are replacing must have been used for investment purposes or use in a trade or business and must be “like-kind” (i.e. US real estate for other US real state).

2. Second, you must find a replacement property if you haven?t already, clearly identify it in writing to your Q.I. it within 45 days. It is necessary to close on the sale on the replacement property within one 180 days.

3. To defer your capital gains taxes, all of the proceeds from the sale of the first property must be used to purchase your new replacement property.

By following these rules you will be better positioned to make a 1031 Tax Exchange. This will be well worth it to you in the end, even if it seems a little complicated from time to time, the basic procedure is really quite simple. Go ahead and keep your money working for you by using a 1031 exchange to defer your capital gains taxes!

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In March of 2008, the price of Gold Bullion per ounce hit an all-time high of $1,030.80.

On August 15th of 2008, gold hit a nine-month low of $773.

That’s a correction of 25%!

In just one month alone – from July 15th to August 19th – gold fell 20%.

However, since that time, gold has regained almost all of its losses.

Still – I know there’s a lot of gold investors out there that are probably wondering if the gold will ever be able to climb over and maintain that $1000 price level. At this point, you’re probably fed up and are thinking seriously of dumping whatever hard assets you have.

I’m going to provide you with a little bit of historical gold trivia that I hope will reassure you.

So, take a deep breath. Relax. And keep reading.

It may be comforting to know that the last great gold bull market of the 1970’s was also interrupted by similar corrections.

1. In November of 1978, gold had a 20% correction.

2. In October 1979, gold lost 13% in four days!

3. Gold had a horrendous correction in 1975, falling 50% from $200 per ounce to $100 in 1976.

At that time, everyone proclaimed that the bull market in gold was over. As gold investors well know, the price of gold continued its climb over the course of the next few years, not stopping until it hit $850 in 1980.

Okay, I know what you are thinking.

That was then. This is now.

Ah, but even in the current bull market, gold has had corrections similar to what we are experiencing now.

1. In the summer of 2006, gold fell 21%.

2. But by the end of 2007, gold had risen 45%.

The point I’m trying to make is that corrections, painful as they are, are normal in bull markets.

Now that we’ve taken a hard look at the statistics, we need to determine if the fundamentals for buying gold bullion are still intact.

Let’s go back to March 2008 when gold had climbed over $1000 an ounce.

You were pretty excited, huh?

Now, ask yourself: what was causing the price of gold to rise?

1. The dollar had long-term, fundemental problems

2. Banks were failing

3. Mortgage lenders were facing insolvency

4. Housing prices were falling

5. The economy was on the brink of recession

6. Oil faced a long-term supply shortage

7. Unemployment was rising

Okay, now ask yourself: have any of the 7 elements listed above changed? Have things improved? Think about it. If the gold bull market were over, we’d have:

1. Healthy banks

2. Stable or rising housing prices

3. A new, major oil discovery

4. Increasing job creation

5. A falling unemployment rate

6. A fiscally responsible government

7. A strong dollar due to a balanced budget and a shrinking deficit

I don’t see any of the above happening anytime soon. Do you?

In conclusion, I would say it is safe to assume that the fundamental reasons for owning gold bullion, as a safe-haven investment, are still valid. I would further venture to say that gold – at $900 per ounce – is the buying opportunity of a lifetime!

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“Aren’t TICs the same as LLCs”? “Don’t they both offer the same benefits”? “Why should one choose a TIC over an LLC arrangement”? If you are reading this article, I am sure you must have asked yourself these questions time and again. Well, I’m here to help. Allow me to answer all your questions and show you why TICs are a much better option than the traditional LLCs.

Before we go forward, it is prudent to first differentiate the two terms we shall be dealing with, i.e. get a clear understanding of what a TIC is and what a LLC is. A TIC, or a Tenancy in Common, is an arrangement which allows an investor to purchase a property which has multiple owners while simultaneously maintaining all the rights a sole owner would have. On the other hand, a Limited Liability Company (LLC) or other limited partnerships comprise of one or more general partners who serve the functions of an ordinary partner while one or more special partners are liable to pay for the company’s debt beyond the amount of money they contributed as capital.

There is no denying that the LLCs and other such entities provide a variety of management and liability protection benefits which direct-fractional ownership arrangements such as TICs can’t provide. So why then, should one choose a TIC over an LLC?

You see the way LLCs make life miserable for an investor is when the arrangement is used by co-ownership groups occupying some, if not all, of the co-owned property. In such cases, Limited Liability Companies just don’t cut it because the legal and tax disadvantages created by these entities outweigh the benefits so much that they make the whole venture seem futile.

On the contrary, a TIC arrangement has a lot to offer for investors. For starters, an investor is blessed with a great amount of buying power. Small investors, who might not have been able to even dream about a certain project because the costs were too high, can find themselves easily a part of the project because they are able to pool-in their resources and make large purchases together. Moreover, the fact that TICs are arranged by a team of real estate professionals, known as a ‘Sponsor’, enables the power of professional management of the project for the investors. The advantages of having this Sponsor are multi-fold. Firstly, decision making becomes far more effective than anything possible under an LLC arrangement.

Furthermore, a TIC owner is guaranteed a stable monthly income. Some might argue that this income is the same as the cash flow received under a single-tenant arrangement. However, these people forget that the tenant remains the responsibility of the owner in an LLC arrangement, while in the case of TICs, the Sponsor sets up the arrangement and thus provides highly-reliable tenants. Additionally, as these TIC Sponsors deal with many properties, they are able to command great leverage when dealing with lenders. Hence, the Sponsor might be able to attain very favorable financial arrangements for the TIC and its owners.

Moreover, as TICs have little upfront costs, they allow investors to diversify and reduce their risks by purchasing two or more property types. This is substantially above and beyond anything that LLCs can offer as LLCs and other such entities may require large minimum cash injections which may tie-up too much of an investor’s money, thus leaving him/her at the mercy of just one project.

So all said and done, if you ever have to choose between a TIC and an LLC arrangement, the decision should be simple and straightforward; TICs rule!

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