The objective of this course is to teach the real estate professional how he or she can help clients in buying and selling property on a tax-favorable basis.

In accordance with TREC rules Sections 535.71 and 535.72D, the first two lessons of the course seek to provide a method of real estate purchase using pretax dollars and of growing the estate within a qualified product. We will discuss the application of current tax advantages of using both qualified and non-qualified tax products such as IRA’s, SEP IRA, 401k, Roth IRAs and charitable gift annuities. The use of these applications will provide the real estate professional with the opportunity to create a long standing and profitable relationship with his or her clients, as well as attracting a more sophisticated investor wishing to find an alternative to 1031 exchanges.

The final lessons of this module will explain the many important aspects of Internal Revenue Code Section 1031. The course will focus on the benefits of the 1031 exchange for the investor, licensed real estate agent/broker and other parties to the transaction. Upon completion of this course, the student will learn which properties qualify under Section 1031 and how to use the various types of 1031 exchanges to enhance the client’s position in the investment real estate market.

Learning Objectives

Upon completion of this module the student will:

• Be able to identify motivated buying and selling clients.
• Know the attributes of qualified and non-qualified products and how they can be of benefit to the sales process.
• Be able to identify the restrictive rulings of the 1031 exchange program.
• Know how money can be accumulated using pre-tax dollars, accumulate interest on a tax-deferred basis, and create litigation protection.
• Know charitable strategies of creating income and tax relief for individuals or families owning highly-appreciated real estate.
• Know about Charitable Gift Annuities, and the annuity payments, income benefits and tax advantages associated with them.
• Know the parameters that the IRS uses to define a valid like kind exchange.
• Know the pros and cons of various exchanging alternatives.
• Know the mechanics of a successful tax-deferred exchange and the role of each party in those exchanges.
• Be familiar with exchange documentation and the role of a qualified intermediary.
• Understand what constitutes “boot” and how to deal with it.
• Know how to calculate whether a sale is to be preferred over an exchange.

Approved Course Number:

04-00-100-7483