Bankers Exchange Services

LandAmerica 1031 Exchange Services Company, Inc. announced that effective November 24th, they would not be accepting any new exchange customers and would be terminating their operations immediately. A significant portion of the exchange funds that Land America Exchange received were invested in securities that they are currently unable to sell or borrow against. Exchangers needing access to their funds in order to close on replacement properties within their prescribed time lines may face real challenges.

If you have a 1031 exchange transaction that you need to open, please consider Bankers Exchange Services. BES, wholly owned by Bay Commercial Bank, is participating in the FDIC Insurance “Temporary Liquidity Guarantee Program”. This program allows for all exchange funds deposited into non-interest bearing transaction deposit accounts and held in domestic offices of participating FDIC-insured institutions, to be fully insured. This provides an excellent option for exchangers whose proceeds will be over the current FDIC limit of $250K for individuals or $500K for joint accounts. You will be assured that the entire amount will be backed by the FDIC while held by Bankers Exchange Services. This program has been put into place by the FDIC and will remain in effect until at least December 31, 2009.

We also offer other types of deposit instruments including interest bearing and CDARS accounts. Some restrictions apply to the CDARS account, so please contact us for details.

When you work with Bankers Exchange Services, you will work with our highly experienced and professional exchange team. We have certified exchange specialists® on staff as well as an advisory attorney, all of whom will be happy to answer questions and lend assistance in structuring your exchange. We look forward to earning your trust and providing you with excellent service.

Bankers Exchange Services can be reached toll free at (877)989-1031 and has three locations to serve you in Walnut Creek, Oakland and Long Beach, California.

 
There are distinctive types of oil, gas, and mineral interests. A mineral estate is the perpetual interest in all the minerals on the land, and they are generally divided into leases, royalties, and production payments.

An Oil, Gas and Mineral Interest, often referred to as a working or operating interest, is a percentage of ownership in an oil, gas or mineral lease, and is considered a real property interest for federal tax purposes and therefore eligible for a 1031 tax deferred exchange. A working interest allows the lessee to enter the land and extract oil, gas and minerals for a set period of time or utill exhaustion, and with that, the obligation to incur the cost of operating expenses such as exploration and extraction. Often times, the sale of working interests include the sale of related equipment and other tangible personal property. If this is the case, the equipment can either be sold or handled as a separate personal property exchange.

A mineral royalty is a non-operating interest wherein the owner does not incur any cost of production, and receives a designated percentage of all minerals produced for the life of the property interest. A royalty interest is also considered real property for federal tax purposes.

A production payment is the right to a specified share or production from a mineral property when that production occurs. It is a carved out payment and is not considered real property for federal tax purposes and an exchange of a production payment for real estate will not qualify under section 1031.

Both working interests and royalty interests are exchangeable with other working and royalty interests as well as with ownership in other real estate, such as an apartment building, office building or single family rental home.

Remember, there is no substitute for effective tax planning. Once you and your tax advisor have determined that a 1031 tax deferred exchange is appropriate Bankers Exchange Services will guide you through the exchange process to successful completion. Please contact Erica O’Leary or Wendy Gallagher with your exchange questions. You can reach us toll free at (877) 989-1031.

Welcome to the September 3, 2008 edition of 1031 exchange.

KCLau presents 48 Fuel Saving Tips posted at KCLau’s Money Tips, saying, “Article on how to save fuel”

KCLau presents Frugal living doesn’t mean cheap posted at KCLau’s Money Tips, saying, “List of benefits of being frugal and what frugality is about”

James Lee presents The Unexpected Benefit of Taking Things Personally posted at Online Business Freedom.

Robert Phillips presents How to Use Blog Carnivals to Increase Traffic posted at How to Create a DVD without Spending a Dime.

KCLau presents How a medium family can retire comfortably (Real Life Case Study) posted at KCLau’s Money Tips, saying, “a success story about a frugal family. If everyone learn to manage cash flow like they do, there will be no financial problem in Malaysia.”

KCLau presents What Do You Know About Bankruptcy? posted at KCLau’s Money Tips, saying, “Bankcruptcy is a word that immediately brings a negative vision to our minds. It happens everywhere in the world and is not partial to a certain country, race or nationality. An article on how bankruptcy happens and how to be discharged from bankruptcy.”

imarketing4s presents Taxes and Penalties Involved in a Loan | Unsecured Loans Now Articles posted at Unsecured Loans Now.

Edith presents BizTechDay – Use Technology to Grow Your Business, Saturday October 25 San Francisco posted at BIZtechDay.

mortgage/financing

Ace Elliott presents Avoiding Mortgage Foreclosure posted at Care on Credit, saying, “As the home mortgage market sways find out what you can do to anchor yourself and weather the foreclosure storm.”

real estate market

Joe Manausa presents 3 Bogus Real Estate Statistics – Know Them Or Be Burned By Them posted at Really Better Real Estate, saying, “There is a disturbing habit of our recognized industry leaders to quote statistics that have no basis at all. Some of them are downright wrong! This article will recognize three of the most important bogus real estate statistics that everyone ought to know about.”

Joe Manausa presents What Homes Have Sold? New Versus Resales posted at Tallahassee Real Estate Blog, saying, “New home sales versus resales, you might be surprised to find that builders are not helping with the current over-supply of homes on the market.”

Joe Manausa presents Tallahassee Market Update posted at Real Estate Market Reports, saying, “Here is a housing inventory report, hot off the press for the housing market. The statistics are starting to point out that inventory levels seem to be falling for the first time in many years.”

tax implicatgions

Joe Manausa presents How To Dispute Your Property Taxes posted at Tallahassee Real Estate Blog, saying, “As long as the assessed value does not exceed the market value they will raise the assessed value, so it is important to know what your property is worth today!”

That concludes this edition of the 1031 Exchange carnival Submit your blog article to the next edition of 1031 exchange using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Thank you for visiting our monthly exchange blog.  If you have any questions on 1031 exchange please contact our office at (877) 989-1031.

Technorati tags: 1031 exchange, blog carnival.

Welcome to the August 3, 2008 edition of 1031 exchange.

KCLau presents How to Calculate Your Investment Portfolio Return? posted at KCLau’s Money Tips, saying, “About how to calculate your investment portfolio returns.”

Helen Anderson presents 5 Credit Card Fees You Probably Didn’t Know About posted at Bankaholic.

KCLau presents Average Monthly Household Income in 2007: Is it enough? posted at KCLau’s Money Tips, saying, “According to a survey done by the Statistic Department for the Economic Planning Unit, published in Personal Money Magazine June 2008 edition, a typical family in Malaysia earns only RM3686/month. How much this is worth and how much can be spent.”

Robert Phillips presents How to Create an Audio Product Practically for Free posted at CYBERCA$HOLOGY.

KCLau presents The Money Book: A CAP Guide to Managing Your Money posted at KCLau’s Money Tips, saying, “Published by Consumers Association of Penang (CAP), a run down on how to manage your money and a list of what the money book discusses.”

James Lee presents Massive Action… TO COMPLETION! posted at Online Business Freedom.

Robert Phillips presents 3 Simple Ways to Increase Blog Traffic posted at How to Create a DVD without Spending a Dime.

investing strategies

Mark Babineaux presents the-law-of-attraction posted at Where-is-my-success-i-don’t-know-what-to-look-for.

Value Seeker presents Stock Investment Resource: Stock Market Investing Tips – Don’t Overleverage posted at Stock Investing, saying, “Be careful with margin trading. If you take on too much
leverage, you may risk a margin call.”

Helen Anderson presents 3 Warnings Signs Your Bank May Fail posted at Bankaholic.

Larry Russell presents Financial Planning Reading List posted at Pasadena Financial Planner.

mortgage/financing

Raymond presents How Credit Scores Work And How Scores Are Calculated posted at Money Blue Book.

real estate market

Joe Manausa presents Housing Prices Decline Slightly – A Clear Picture Is Forming posted at Tallahassee Real Estate Blog, saying, “While there have been many articles written on the declining real estate market, most are filled with facts and figures that are difficult for the lay-person to follow. This article is filled with easy-to-understand graphs that demonstrate the modest decline in home prices.”

Joe Manausa presents Tallahassee Real Estate – Market Graphs Updated posted at Tallahassee Real Estate Blog, saying, “A compilation of real estate market graphs that shows different segments of the real estate market and how it is performing.”

transaction tips

Value Seeker presents Stock Investment Resource: Stock Market Investing Tips – Democrats and Offshore Drilling posted at Stock Investing, saying, “Author discusses the lunacy of the Democratic opposition to offshore drilling.”

Phil B. presents Stop Using Credit Cards « Phil for Humanity posted at Phil for Humanity, saying, “Save money by stop using credit cards.”

That concludes this edition. Submit your blog article to the next edition of 1031 exchange using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Thank you for viewing our blog, if you have any questions regarding 1031 Exchanges please give us a call at (877) 989-1031.

Disclaimer – The views expressed in these blogs do not necessarily reflect those of Bankers Exchange Services, Bay Commercial Bank or The 1031 Exchange Blog Carnival host.

Technorati tags: 1031 exchange, blog carnival.

When I select a qualified intermediary to handle my 1031 tax deferred exchange, what safeguards can I take to insure that my money will be safe in their hands? The answer to this question is an important one since your investment property equity can be a substantial part of your overall wealth. Most qualified intermediaries are reputable, honest and ethical, but like all businesses it only takes one or two making newspaper headlines to cast doubt on an entire industry.

Some of the questions that you ask a qualified intermediary before you make your choice should include the following:

1. Will my money be placed in a segregated account rather than a pooled account with other exchanger’s money? You want your funds placed in a separate account which is FDIC insured up to the legal limit per depositor rather than a pooled account which will contain all the combined funds from all of the exchange clients. You will want a separate account set up using your taxpayer ID number.

2. Does the QI carry a Fidelity Bond and E&O insurance? A fidelity bond helps cover the loss a QI may suffer due to a dishonest act by one of its Employees. Errors & Omission or professional liability insurance protects against claims that something was handled incorrectly. In both cases these types of insurance policies will go a long way in enabling the QI to have the resources to protect your money.

3. What kind of internal processes and audit controls does the QI have in place? Will you receive an account statement or have access to an online account? Bankers Exchange Services is wholly owned by Bay Commercial Bank with branches in the East Bay and Southern California. Because we are bank owned we fall under the very strict regulations that govern our bank.

4. What is the technical ability of the staff employed by the QI? You want to work with someone who can answer your questions in a clear and concise way and explain the process simply. Bankers Exchange Services has highly trained professionals to assist you, including two certified exchange specialists® and an advisory attorney on staff. With the help of your tax advisor we can guide you effortlessly through the process and save you thousands of tax dollars.

Remember there is no substitute for effective tax planning! We at Bankers Exchange Services are committed to helping you achieve your wealth building goals. If you have any questions or would like to discuss any aspect of a 1031 exchange give us a call at (877) 989-1031.

Welcome to the July 9, 2008 edition of 1031 exchange.

KCLau presents Do you have the assets to pay for your liabilities? posted at KCLau’s Money Tips, saying, “An article on whether you hav enuff assets to pay off liabilities and how to create assets.”

Ed Pudol presents Adsense Alternative posted at Adsense success tips and guides.

mortgage/financing

imarketing4s presents Foreclosures: Tips and Warnings | LoanHunt.com posted at LoanHunt.com.

tax implicatgions

Investing Angel presents The 2008 Election And The Stock Market » Free Stock Market Investing Tips posted at Stock Tips, saying, “Your investment decisions right now may largely depend on who
you think will win the 2008 election.”

transaction tips

Heather Johnson presents 5 Ways to Save Money on Your Summer Energy Bill posted at American Consumer News.

That concludes this edition. Submit your blog article to the next edition of 1031 exchange using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Thank you for visiting my 1031 Exchange Carnival.  If you are currently working on an exchange please contact Erica O’Leary at Bankers Exchange Services for more information.

Technorati tags: 1031 exchange, blog carnival.

If you plan to sell your investment real estate but don’t feel that you have enough gain to warrant a 1031 tax deferred exchange then ask yourself the following question. When you bought your current investment property did you exchange into it? Remember that your adjusted cost basis transferred into the currently owned property if you acquired it in a 1031 exchange. This could mean a big tax hit even if the current property hasn’t appreciated or has dipped in value since acquiring it in the exchange.

Sometimes people confuse the amount of equity they have in a property with the amount of gain. You can have very little equity in a property because you refinanced it and took cash out, and/or there was an overall drop in value, but can still have significant gain to pay taxes on.

Gain is calculated by taking the price that you paid for the property when you acquired it and adding the cost of any capital improvements you made to the property, and then subtracting out depreciation. If you exchanged into the property, you will also subtract out the amount of deferred gain from the previous exchange. This will give you roughly what your adjusted cost basis is. It is the difference between this adjusted cost basis figure and your current contract sales price (less expense of sale costs*) that will determine your capital gains tax. It is possible to have a significant gain in a property with little or no equity.

The purpose of a 1031 exchange is to defer Federal, and in most cases state, depreciation recapture and capital gain income tax liabilities.

As always, check with your tax advisor to determine whether or not a 1031 tax deferred exchange is necessary or appropriate for your situation. If you decide that you need to go forward with a 1031 exchange, please contact Bankers Exchange Services and ask to speak with one of our highly qualified exchange specialists.

* Expense of sale costs would include items such as real estate commissions, transfer tax, settlement fees, etc.

For questions please contact Bankers Exchange Services at (877) 989-1031

If you are planning to sell your investment property and reinvest in other investment property then you should consider a 1031 tax deferred exchange. People that own rental and investment property have many reasons for wanting to sell it. They may own a single family home with a good rental history and significant appreciation and decide that they would like to move up and acquire an apartment building as part of a wealth building strategy. Or they may have relocated their personal residence and now find that it is difficult to manage a rental property in a different geographic location. Some people, particularly retirees, find that they no longer want to be landlords and exchange out of their investment property and reinvest in Tenant in Common structured transactions which are fully managed for them and qualify for 1031 exchange treatment.

The following is an example of a rental townhouse that the owners bought 10 years ago:

Original Purchase Price $199,000.00
Plus: Capital Improvements $100,000.00
Less: Accumulated Depreciation $30,000.00
Total Net Adjusted Basis $269,000.00

New contract sales price $450,000.00
Less: Net Adjusted Basis $269,000.00
Less: Selling expenses $31,500.00
Total Capital Gain $149,500.00

Depreciation Recapture @ 25% $7,500.00
Federal Capital Gains @ 15% $22,425.00
State Capital Gains (CA) @ 9% $13,455.00
TOTAL TAXES DUE $43,380.00

Contract Sales price $450,000.00
Less Cost of Sale (commission, etc.) $31,500.00
Less Loan Payoff $139,000.00
Proceeds from Sale $279,500.00
Less taxes due on Capital Gain $43,380.00
Net Proceeds after taxes $236,120.00

The above example illustrates, that this owner would benefit from doing an exchange since it is their intent to buy another piece of investment property and an exchange would allow the seller to defer the payment of the $43,380.00 in taxes and would increase the amount of proceeds to $279,500.00. This in turn allows for a larger down payment and increased buying power on the new investment property.

In order to fully defer the capital gains taxes when doing an exchange you will need to:

1. Buy replacement property that is equal or greater in value than the property being sold
2. Use all of your exchange equity to acquire the replacement property
3. Obtain a loan on the new property that is equal or greater than the loan balance on the property being sold

There are many variables that may be unique to your situation so always check with your tax advisor to determine whether or not a 1031 tax deferred exchange is necessary or appropriate. If you decide that you need to go forward with a 1031 exchange, please contact Bankers Exchange Services and ask to speak with one of our highly qualified exchange specialists.

Please contact Bankers Exchange Services directly with any questions – (877) 989-1031

With the real estate market in what seems like a downward spiral the need for doing a 1031 Exchange may seem less necessary. Recent events in the 1031 industry have made investors more leery of entering into an exchange transaction. There are many factors to consider when contemplating an exchange. The first thing to do is seek the advice of a tax professional; the second is to check with a financial planner to ensure your investment portfolio is not to heavily weighted in any one type of investment. Once an investor feels confident that a 1031 Exchange is the correct investment strategy they must find an accommodator they can trust with their funds.

Questions to ask a potential Qualified Intermediary: Are they bonded? Do they carry errors and omissions insurance? Do they segregate exchange funds into separate trust accounts that are federally insured? If the answer to all of these questions is YES that is a good indication you will be dealing with a reputable industry professional.

For help with any of the aforementioned topics or any other exchange related questions give Bankers Exchange Services a call, we have several extremely qualified individuals on staff that would be more than happy to walk you through an exchange transaction from beginning to end. We always want our clients to feel at ease when doing an exchange. Client satisfaction is our number one priority.

For more information please contact Bankers Exchange Services at (877) 989-1031