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April 7th, 2021 8:50 AM
What is it like for an appraiser in an extreme real estate market in which homes are being purchased and sold at a rapid pace and market data is being pulled ahead of time? When prices are rising almost or even more than 1% every month, market data will struggle to catch up. Historical comparable sales will show large differences between value and the price agreed upon. But, as an appraiser, we are bound to be cautious since we are accountable or shall I say responsible to the party whom is lending a good % of the agreed upon price for at least the next 5 years. Interest rates have risen from 2.5% to 3.5% so many view this as only a 1% increase but look at over the life of the loan and you will be amazed at what your really paying for a loan. 

Posted by Richard Wayne Abatelli on April 7th, 2021 8:50 AMLeave a Comment

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The real estate market continue to stay hot on the east end and Long Island in general. The most telling sign "Nationwide" as reported by the National Association of Realtors, is that there are more real estate agents than homes for sale. This reflects both the extremely tight supply of homes and how surging prices are persuading tens of thousands more people to try their hands at selling real estate. Let's discuss the surging prices and how it affects the appraisal process. In the past, lending institutions frowned on adjustments. Too many adjustments indicated poor comparable sales. Makes sense. However, with prices increasing monthly, the appraiser has no choice but to adjust the time or date sold for the surging increase in prices. In the past, appraisers typically allowed 3-6 months of time difference before making an adjustment for time. But for non-lender appraisals and for many lenders requiring an appraisal, adjustments are necessary right-a-way.
Stay up-to-date on real estate values, call Abatelli Real Estate Appraisals at 631-513-0442.

Posted by Richard Wayne Abatelli on March 22nd, 2021 1:04 PMLeave a Comment

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Determining the value of a home or real estate in general depends on both art and science. Yes, there is an increasing availability of massive amounts of data and the ability to analyze that information. Analysis of millions of pieces of disparate data informs nearly every decision made involving residential real estate.
Real estate agents, consumers, investors, mortgage lenders, insurance companies and other financial institutions need accurate valuations to inform their immediate decisions about investing in real estate. But big data has a deeper value than just estimating today's property value's. It can be used to evaluate ongoing risks that could impact not only future property values but also the cost of maintaining and perhaps repairing properties. We have all seen risk due to climate change, natural disasterstypical storms and environmental hazards. You now can add crime data and school district data.
A deep understanding of the risks associated with a property and a community is essential. Call or text 631.513.0442 or visit

Posted by Richard Wayne Abatelli on March 9th, 2021 3:35 PMLeave a Comment

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February 27th, 2021 7:46 AM
The use of available data from public records(sales/listing prices/rental prices, etc.) to approximate value. Their error rate can be close when homes are similar, as with small lot and house size's such as properties in the outer borough's of Manhattan, and Nassau County or developments in outlying area's. However, the error rate is much higher, say 7.5%+ when they are off-the-market such as on the east end of Long Island. This can amount to tens of thousand's of dollars when the median price range in the towns of Southold, Riverhead, Southampton, Easthampton and Shelter Island are certainly more than One-half Million to well over One Million $$$$$. Can YOU afford not to have a NYS Certified Appraiser provide you with more specific analysis of your market and determine what's overpriced and underpriced. Call or text us at 631.513.0442. 

Posted by Richard Wayne Abatelli on February 27th, 2021 7:46 AMLeave a Comment

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February 21st, 2021 11:56 AM
How do you report Section 1031 Like-Kind Exchanges to the IRS?
You must report an exchange to the IRS on Form 8824Like-Kind Exchanges and
file it with your tax return for the year in which the exchange occurred.

Form 8824 asks for :
(1) Descriptions of the properties exchanged.
(2) Dates that properties were identified and transferred.
(3) Any relationship between the parties to the exchange.
(4) Value of the like-kind and other property received.
(5) Gain or loss on sale of other (non like-kind) property given up.
(6) Cash received or paid; liabilities relieved or assumed.
(7) Adjusted basis of like-kind property given up; realized gain.

If you do not specifically follow the rules for like-kind exchanges, you may be held liable for taxes, penalties, and interest on your transactions.

Posted by Richard Wayne Abatelli on February 21st, 2021 11:56 AMLeave a Comment

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February 17th, 2021 9:18 AM
Restrictions for deferred and reverse exchanges.
You may disqualify the entire transaction from like-kind exchange treatment and make ALL gain immediately taxable if you take care control of CASH or other proceeds before the exchange is complete. If they are received at the conclusion of the exchange, the transaction will still qualify as a like-kind exchange. Gain may be taxable, but only to the extent of the proceeds that are not like-kind property.
Use a qualified intermediary to hold those proceeds or cash until the exchange is complete. You can NOT act as your own facilitator nor can your real estate agent, broker, investment banker, accountant, attorney, employee or anyone who has worked for you in those capacities  within the previous 2 years.
Be careful in your selection of a qualified intermediary. There have been incidents of intermediaries declaring bankruptcy or otherwise being unable to meet their contractual obligations to the taxpayer. It could prevent YOU in not meeting the strict timelines set for a deferred or reverse exchange, thereby disqualifying the transaction from SECTION 1031 deferral or gain.

Posted by Richard Wayne Abatelli on February 17th, 2021 9:18 AMLeave a Comment

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February 11th, 2021 9:06 AM
What are the time limits regarding a Section 1031 Deferred Like-Kind Exchange?
While a like-kind exchange does not have to be a simultaneous swap of properties, you must meet two time limits or the entire gain will be taxable. These limits cannot be extended for any circumstance or hardship except presidentially declared disasters.

1st limit: you have 45 days from the date you sell the relinquished property to identify potential replacement properties. This must be in writing, signed by you and delivered to a person involved in the exchange like the seller of the replacement property or a qualified intermediary. Notice to your attorney, realtor, accountant or similar persons acting as your agent is not sufficient. Follow the IRS guidelines for the maximum # and value of properties that can be identified. 
2nd limit: the replacement property must be received and the exchange completed no later than 180 days after the sale of the exchanged property or the due date(with extensions) of the income tax return for the tax year in which the relinquished property was sold, whichever was earlier. The replacement property must be the same as the property identified within the 45-day limit described above.  

Posted by Richard Wayne Abatelli on February 11th, 2021 9:06 AMLeave a Comment

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February 2nd, 2021 1:05 PM
What property qualifies for a Like-Kind Exchange?? Both the relinquished property you SELL and the replacement property you BUY must meet certain requirements.

Both properties must be held for use in a TRADE or BUSINESS or for INVESTMENT.
Property for personal use, like a primary residence, second home or vacation home, does not qualify for like-kind exchange treatment.

Both properties "Sale and Purchase" must be similar enough to qualify as like-kind. Quality or grade does not matter. Most real estate will be like-kind to other real estate.
Real property that is improved with a residential rental house is like-kind to vacant land. 

Section 1031 does not apply to exchanges of:
Inventory or stock trade/Stocks, bonds or notes/Other securities or debt/Partnership interests/Certificates of trust.
(see Part 3 on February 11th)

Posted by Richard Wayne Abatelli on February 2nd, 2021 1:05 PMLeave a Comment

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January 28th, 2021 9:18 AM
Tired of paying taxes on a gain in your business or investment property, please say YES. The 1031 exception which you probably have heard about allows you to postpone paying this tax if you reinvest the proceeds in similar property as part of a qualifying like-kind exchange. Gain deferred is tax deferred, not tax-free.
This exchange includes (a) like-kind property exclusively, or (b) like-kind property along with cash, liabilities and property that are not like-kind.  If you receive cash, relief from debt, or property not like-kind, you may trigger some taxable gain in the year of the exchange. Thus, there can be deferred & recognized gain in the same transaction-when you exchange for like-kind property of lesser value.

WHO QUALIFIES? Owners of investment and/or business property whether as an individual, C corporation, S corporation, general or limited partnerships, LLC's, trusts and any other taxpaying entity under Section 1031.
(see PART 2:February 4th) Richard Wayne Abatelli is the owner of Abatelli Real Estate Appraisals and is a Associate Broker with Douglas Elliman, Cutchogue, N.Y

Posted by Richard Wayne Abatelli on January 28th, 2021 9:18 AMLeave a Comment

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January 14th, 2021 10:05 AM
Highest income tax bracket of 37% applies when taxable income hits:
--$628,300 for married individuals filing jointly and surviving spouses;
--$523,600 for single individuals and heads of households;
--$314,150 for married individuals filing separately'
--$  13,050 for ESTATES and TRUSTS.
Standard Deduction:
--$  25,100 for married individuals filing jointly and surviving spouses;
--$  18,800 for heads of households;
--$  12,550 for single individuals & married individuals filing separately;
(Additional Standard Deduction for individuals  65 years or older)
--$    1,350 for married taxpayers & surviving spouses; $1,700 for other taxpayers.
...........phases out when (AMT) income exceeds $85,650 for ESTATES AND TRUSTS
Estate & Gift Tax adjustment exclusions: Gift =$15,000;Federal estate = $11,700 
Maximum reduction for real property under special  valuation method = $1,190,00

Posted by Richard Wayne Abatelli on January 14th, 2021 10:05 AMLeave a Comment

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