Is Gold Eligible for a 1031 Exchange?

Utilizing 1031 Exchanges for Tax Deferral in Investment: Exploring Property Eligibility and Limitations

Investors often aim to defer capital gains taxes through 1031 exchanges, which boosts funds for reinvestment and enhances investment leverage. Sequential exchanges have the potential to compound these benefits, helping to facilitate the possibility of portfolio growth. Some taxpayers have attempted to expand the scope of eligible properties, including collectibles, intellectual property, and valuable metals.

While stocks and securities do not qualify, certain items like coins, artwork, and antiques were occasionally eligible before the Tax Cuts and Jobs Act (TCJA). Nonetheless, even with looser regulations, the IRS imposed restrictions, such as disallowing gold-for-silver exchanges and gold coin-for-bullion exchanges.

TCJA Exclusion and IRS Rulings on 1031 Exchanges

Following the enactment of the TCJA, the scope of 1031 exchanges was narrowed down to exclusively include real estate. The IRS provided further clarification through rulings such as REG-117589-18, which outlined the statutory limitations on like-kind exchanges. According to this regulation, real property encompasses land, land improvements, unsevered crops, natural products of the land, and adjacent water and air space. It also encompasses permanent structures like roads and bridges.


Understanding the Basics of a 1031 Exchange

A 1031 exchange is a valuable tool for real estate owners. It allows them to strategically shift their investments without incurring immediate capital gains taxes. Here's how it works:

In summary, a 1031 exchange allows you to defer capital gains taxes and reinvest the proceeds into another property, thereby seeking to maximize your investment potential.

Exploring Sequential 1031 Exchanges and Tax Deferral Strategies

While a 1031 exchange allows you to defer capital gains tax, it's important to note that the tax is not eliminated entirely. If you eventually sell the replacement property acquired through the exchange, you will owe capital gains tax on any profit from that sale. Additionally, you will also be liable for the deferred tax on the original asset.

However, there is a potential strategy to continue deferring the tax liability. By deferring the tax until the point of transferring the property to an heir through inheritance, it becomes possible to entirely avoid the capital gains tax. This is due to the concept of a stepped-up value for inherited assets.

When the property is inherited, the heir receives it at its stepped-up value, which is determined based on its worth at the time of the original owner's death. This stepped-up value becomes the new basis for the heir, and no tax is due for any gains that occurred prior to the inheritance.

By carefully planning and utilizing this strategy, investors can effectively defer their tax obligations through sequential 1031 exchanges and ultimately pass on the property to heirs, allowing them to enjoy the benefits of a stepped-up basis and avoiding capital gains tax on prior gains.

General Disclosure

Not an offer to buy, nor a solicitation to sell securities. All investing involves risk of loss of some or all principal invested. Past performance is not indicative of future results. Speak to your finance and/or tax professional prior to investing. Any information provided is for informational purposes only.

Securities offered through Emerson Equity LLC Member: FINRA/SIPC. Only available in states where Emerson Equity LLC is registered. Emerson Equity LLC is not affiliated with any other entities identified in this communication.

1031 Risk Disclosure:

·     There’s no guarantee any strategy will be successful or achieve investment objectives;

·     All real estate investments have the potential to lose value during the life of the investments;

·     The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities;

·     All financed real estate investments have potential for foreclosure;

·     These 1031 exchanges are offered through private placement offerings and are illiquid securities. There is no secondary market for these investments.

·     If a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions;

·     Costs associated with the transaction may impact investors’ returns and may outweigh the tax benefits


Risk Assessment for Retirement Planning: What to Know

As you approach retirement, there are a variety of important considerations to keep in mind, not just whether or not to take up pickleball. One of the biggest worries for many retirees is ensuring their funds last throughout their retirement. To help achieve financial stability in retirement, it's important to understand and prepare for a range of risk factors, including inflation, market fluctuations, lifespan, spending habits, and health. This can be achieved through a comprehensive risk assessment.

By taking a closer look at each of these risk factors, you can better understand their potential impact on your retirement funds and create a more secure financial plan for your golden years.

Risk Factors of Retirement

Longevity, or living a longer lifespan, can have a significant impact on retirement planning. As life expectancies continue to increase, the likelihood of outliving one's retirement savings becomes a growing concern. This means that individuals must plan for a potentially longer period of time in which they will need to have a steady source of income.

To prepare for a longer lifespan, retirees should consider strategies such as delaying the age at which they start drawing Social Security, which can increase their monthly payments. Additionally, investing in a lifetime income annuity can provide a guaranteed source of income for the future.

It's important for retirees to factor in the possibility of a longer lifespan when planning for retirement, as it can have a major impact on the sustainability of their financial security in their later years.


Market Volatility and Market Risk are two key factors that can greatly impact your retirement funds. Market volatility refers to the fluctuations and instability of the financial market, and market risk is the chance that your investments will lose value. Market risk is a common concern among retirees, as they have limited time to make up for any losses.

For instance, if the stock market experiences a downturn, your portfolio value could decrease, leaving you with less money for retirement. Market volatility can also make it difficult to determine when to invest, when to sell, and when to take distributions. This uncertainty can lead to fear and indecision, and may cause you to miss out on growth opportunities.

Additionally, market risk can also impact your investment strategy, as you may need to reduce your exposure to equities as you approach retirement. This can limit your potential for growth, but can also reduce your market risk, allowing you to preserve your retirement savings.

Overall, market volatility and market risk are critical considerations for retirees, and it's important to have a solid understanding of how they may impact your retirement funds. This can help you make informed investment decisions and ensure that your retirement is secure and comfortable.

Inflation is one of the most significant risk factors associated with retirement. Inflation refers to the general rise in prices over time, which can erode the purchasing power of your savings and retirement funds. This means that your hard-earned money may not be able to buy as much in the future as it can today. Over time, the cost of living, including housing, healthcare, and food expenses, can increase, leaving retirees struggling to make ends meet.

Retirees are particularly vulnerable to inflation, as they rely on fixed sources of income, such as pensions or Social Security, which may not keep pace with rising costs. This is why it's crucial to factor in inflation when planning for retirement. To mitigate the effects of inflation, some retirees choose to invest in assets that have the potential to grow with inflation, such as stocks, real estate, and commodities.

Others may choose to use a combination of both fixed and growth investments to balance their portfolios and reduce market risk. It's also important to plan for unexpected expenses, such as medical costs, which can rise rapidly with inflation. By considering the effects of inflation on your retirement plans, you can ensure that your nest egg will last throughout your Golden Years.

Overspending is a common risk factor that can greatly affect retirement funds. It is important to create a budget and stick to it, especially during retirement when there is no steady source of income. Overspending can quickly drain retirement savings and leave individuals struggling to make ends meet. It is important to have a clear understanding of monthly expenses and make adjustments where necessary to ensure that retirement funds last throughout their lifetime.

It's also a good idea to prioritize essential expenses such as healthcare and housing, and reduce spending on non-essential items such as dining out, entertainment, and travel. By staying disciplined with spending and making adjustments as needed, individuals can mitigate the risk of overspending and ensure a stable financial future during retirement.


Healthcare Expenses can have a significant impact on retirement, especially as people age and require more medical care. The cost of healthcare is constantly rising and it can be difficult to predict exactly how much you may need to set aside for medical expenses in retirement.

Some people may have chronic health conditions that require ongoing treatment, while others may require more significant medical care in the form of hospital stays or surgeries. Additionally, long-term care expenses, such as nursing homes or assisted living facilities, can also be a major drain on retirement savings.

To mitigate the impact of healthcare expenses on your retirement, it's important to plan ahead and prepare for the unexpected. This may involve setting aside money in a dedicated healthcare account or investing in a long-term care insurance policy.

You should also take an honest look at your own health history and consider factors such as your lifestyle, genetics, and overall health, to better estimate your healthcare expenses in retirement. Additionally, it's important to stay informed about changes in the healthcare industry and be proactive in managing your healthcare expenses as you age.

Making Preparations

Proactive preparation for the potential risks of retirement can help you strive for a more secure financial future. Consulting with financial advisors or estate planners may provide you with expert insight and personalized strategies to potentially manage these risks and attempt to safeguard your retirement savings.

General Disclosure

Not an offer to buy, nor a solicitation to sell securities. All investing involves risk of loss of some or all principal invested. Past performance is not indicative of future results. Speak to your finance and/or tax professional prior to investing. Any information provided is for informational purposes only.

Securities offered through Emerson Equity LLC Member: FINRA/SIPC. Only available in states where Emerson Equity LLC is registered. Emerson Equity LLC is not affiliated with any other entities identified in this communication.

Perspectives on the Multifamily Housing Market After the Pandemic

Housing or multifamily development investments can be used to diversify a portfolio, lower volatility, generate consistent income, and give tax benefits that are unmatched by many other assets. Multifamily properties, once one of the most well-liked asset classes, are now a mainstay for both individual and institutional investors. Therefore, it would seem that the benefits of multifamily investing are obvious.

The complexity of multifamily rental communities must be examined more closely in light of the current situation, which has been brought on by the global COVID-19 pandemic and the ensuing economic depression, in order to determine whether this asset class is still as dependable and successful as it once was.

As a dependable partner and thought leader in the alternative investing sector, Perch Wealth wants to help you better understand the state of the market because we think that investors have the right to make well-informed financial decisions. In this article, we will discuss the potential advantages and disadvantages of multifamily investments in the context of the present economic environment.

The multifamily housing industry was significantly damaged by the COVID-19 epidemic, much like pretty much everything else. As we emerged from the early 2000s, which saw burgeoning multifamily housing building and construction as well as increased investor interest, the coronavirus's rapid spread abruptly put an end to much of that excitement and initial momentum.

The nation's builders, developers, investors, and allies paused to consider its state. We all required some alone time to reflect. What is the next step, and where should I go? What should our strategy be for when we emerge from this?

The 2020 Recession's Impact

The core of the multifamily industry — its basic measure of worth — is its ability to provide access to adequate, safe, healthy, secure shelter for Americans. This capacity was at danger due to the pandemic and the ensuing economic impact. The multifamily rental sector was rattled by the persistent instability of millions of households' ability to pay rent. However, the nature of demand continues as it always has.

Because of this, multifamily fared better than most of its competitors during the pandemic-driven recession of 2020; in fact, only industrial fared better. The market's decline was even considerably smaller than during prior recessions.

Young adults who had relocated to their parents' homes to live under quarantine are now going back to live independently. In spite of the turbulent economy, which is still restoring its equilibrium, families are now contemplating more cheap housing options, with many opting for multifamily rental communities where they may raise their children in a safe environment.

However, the increase in multifamily demand is expected to continue as the economy strengthens. According to CBRE, "a full market recovery will occur in early 2022, with vacancy levels returning to pre-COVID levels and net effective rents increasing by 6% in 2019." Jobs may once more give people the financial freedom they require to leave behind their parents' or friends' homes and move out on their own. But given how fresh the pandemic's uncertainty is in people's minds, many would-be homeowners may continue to act cautiously and opt to continue renting indefinitely. Despite the fact that 2021 may have started out slowly, deals are already entering the pipeline, the competition is tight, and agency debt is finally starting to decrease.

The advent of a new era for multifamily housing investors and developers is therefore indicated. The coronavirus pandemic did not cause any new trends in the multifamily housing market, according to the Urban Land Institute's new report, Emerging Patterns in Real Estate 2021, but rather it significantly accelerated the trends that were already in motion. The pandemic did, in fact, spur new shifts towards suburban locations, preferences for floor plans that support work-from-home options, and integrated outdoor social and recreational areas. While this acceleration is unquestionably true, there is also overwhelming evidence that the pandemic did, in fact, inspire these changes.

The Post-Epidemic Multifamily Housing Market: Trends

People are more aware of the concept of safety and what a truly safe living environment looks like in a post-COVID society. Owners of multifamily housing communities should also be aware of ways to improve their capacity for flexible and remote management.


Trends that are both new and well-established include:

A scaled down "community concept," meaning fewer houses, buildings, or a separate cluster within a bigger neighborhood
Design that is suitable for working from home, as the changing nature of the workday and the workplace may be the coronavirus's most lasting legacy.
Flexibility inside housing units is necessary since areas for daily living must also support and accommodate activities such as working, eating, cooking, and relaxing.
Outdoor areas with amenities
Contactless circumstances
support for innovative retail shopping opportunities, such as safe package storage facilities
Increased movable windows and separate HVAC units that provide access to fresh air
Wider corridors, one-way traffic, alternatives for separation but not complete isolation, signs of effective cleaning and maintenance procedures, more generous shared path routes, and other common area experiences that encourage social distance
Smart home appliances that assist homeowners in controlling things like air quality, security, and temperatures
In order to handle the rental application and signing procedure more successfully and efficiently, leasing agents and management staff should put into practice a few specific tactics.

Recommended techniques comprise:

Virtual tours, which many agents were using before the pandemic but are now considered to be commonplace.
Curbside documentation, which allows new residents to complete an application and sign relevant documents in their vehicle.
Self-guided tours allow prospective clients to explore the facility on their own.

Investors in multifamily housing complexes must continue to stay aware of how the customer's profile is changing as technology fosters greater openness about who the consumer is and what he or she wants.

A Changing Market Develops

Multifamily investment volume is anticipated to rise in 2021 as investors get ready to meet the demands and needs of the current consumer base and as market circumstances continue to get better. The amount of multifamily investments in the US are expected to total roughly $148 billion in 2020, according to CBRE Research. This is a 33% increase above the $111 billion prediction from 2020.

Institutional purchasers and value-add investors may become much more active buyers next year now that future revenue streams are more well understood. Effective rent growth is still rising to record levels. Activity may also rise as a result of offshore buyers, particularly as travel restrictions are relaxed.

Additionally, it is anticipated that low interest rates would persist during the upcoming year. Favorable mortgage rates are a further inducement for enhanced investment possibilities. And the two primary multifamily lenders — Freddie Mac and Fannie Mae — have secured considerable capital availability to support additional purchases.

In the second quarter of 2021, multifamily assets priced at $1 million and up saw a rise in transactions across the country, especially when compared to the preceding three months. Deal flow from April through June also above the five-year quarterly norm, demonstrating a resurgence of faith in the multifamily property class.

Additionally, lenders are following the general recovery of the economy by making financing for high-quality houses available. Actually, the majority of lenders believe that volume will increase following the slowdown in 2020. For assets that proved resilient during the pandemic and/or are currently in a strong recovery position, there are more chances available. Lending rates from banks and credit unions are competitive.

Additionally, the market is doing well for Class A and Class B houses. Most multifamily property managers report collecting between 95% and 100% of rents each month. Rents have also been allowed to be raised from 6% to 12% on average, depending on the asset. a tenet of being an asset is that 90% of the time,s ofss of classes of rentals of classes of of of of:

At the meantime, increased population mobility is boosting the value of real estate in commercial and transportation hubs. Due to easing concerns about the new coronavirus, there is an upsurge in demand for downtown apartments as the urban core starts to recover. The balance between urban and suburban demand is re-emerging as businesses welcome employees back to the workplace. The forecast is favorable for the urban sectors as consumers hunt for entertainment and shopping options. However, suburbia has a certain allure, as apartments are frequently more affordable and have more space, ideal if a prospective tenant is seeking for a space that is the right size for both living and working.

The multifamily housing market has the potential to climb to even higher heights as the economy recovers, as market liquidity improves, and as investors grow more confident in the status of the country.

With committed investors, our team is delighted to get down and go over our progressive investing model. Make an appointment to speak with one of the knowledgeable members of the Perch Wealth team right away, and we'll collaborate to create a long-term investment strategy for you that includes possible cash flow, equity growth, and tax advantages.

General Disclosure

neither a buy-side nor a sell-side solicitation of securities. The material presented here is purely for informational purposes and shouldn't be used to guide financial decisions. Every investment has the chance of losing some or all of the money. Future outcomes cannot be predicted based on past performance. Prior to investing, consult a financial or tax expert.

Financial products made available by Emerson Equity LLC Member: SIPC/FINRA. Only accessible in states where Emerson Equity LLC has a recognized business presence. There are no other organizations mentioned in this correspondence with whom Emerson Equity LLC is associated.

1031 Risk Disclosure:

* There is no assurance that any strategy will be effective or achieve investment goals; * Property value loss is a possibility for all real estate investments over the course of ownership; * Tax status may change depending on the income stream and depreciation schedule for any investment property. All funded real estate investments have the risk of going into foreclosure; adverse tax rulings may prevent capital gains from being deferred and result in immediate tax liability;
1031 exchanges are illiquid assets since they are frequently issued through private placement offerings. There is no secondary market for these investments. * Reduction or Elimination of Monthly Cash Flow Distributions - Similar to any real estate investment, the possibility of suspension of cash flow distributions exists in the event that a property unexpectedly loses tenants or suffers significant damage;