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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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March 28th, 2020 2:18 PM
Is investing in real estate recession resistant? Safer then investing in the equity markets? There are many who have indicated that this is the best time to invest in real estate, even when some think its fully valued. Look, wouldn't you say every other asset class seems so overpriced and so expensive compared to real estate.  
According  to MASHVISOR, a property finding tool for INVESTORS, predicts Equities expect to return 4% over the next decade, which is low compared to Real Estate returns which have averaged 10%-12%.

Posted by Richard Wayne Abatelli on March 28th, 2020 2:18 PMLeave a Comment

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March 16th, 2020 10:10 AM
Several towns on the east end of Long Island are experiencing their worst slump since the financial crisis more then a decade ago, according to the Wall Street Journal. Seasonal and year-round locations such as the North Fork, are being considered as an alternative in 2020. According to Douglas Elliman, the largest realtor on Long Island, the median home price on the South Fork was down 10.2% in 2019.

Posted by Richard Wayne Abatelli on March 16th, 2020 10:10 AMLeave a Comment

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July 31st, 2019 6:52 PM
There is an understandable appeal to buying a weekend or vacation home on the eastern end of Long Island with friends or family members. One look at the local or regional newspapers and/or online will indicate a considerable investment for such.
Co-owning maybe the only feasible path to ownership. After all. two(2) check books are better than one(1). Affordability is out of reach for many real estate properties on both the North and South Forks, so partnering up becomes an ideal solution. The increase in buying power can assist you in the purchase or it could equal; (a) more square footage in your home; (b) more amenities, exterior or interior of both; (c) larger site or (d) some of the above to all of the above*. If your looking to purchase real estate on the east end then it also makes sense to hire an a real estate appraiser. Our knowledge can assist you in making the right investment. 

* New York Times, July 26, 2019.

Posted by Richard Wayne Abatelli on July 31st, 2019 6:52 PMLeave a Comment

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There are challenges especially when the subject property is in an extremely distressed state, limiting similar comparable sales. Identifying and supporting adjustments therefore can be difficult and it is not uncommon for the appraiser to apply larger then normal adjustments for the comparable sales location and condition since it is possible that the search goes beyond the normal neighborhood parameters. This is typically not an issue as long as the appraiser explains the rationale. But remember the appraiser must follow USPAP(Uniform Standards of Acceptable Appraisal Practice) guidelines and the methodology and opinion of value must be supported. Every time a distressed property is acquired and renovated it not only provides potential buyers an opportunity for improved housing, it often has other positive impacts, such as gentrification of the market, improving its value and marketability. Its a plus for the immediate neighborhood as well as the adjoining communities.

Posted by Richard Wayne Abatelli on May 22nd, 2019 9:51 AMLeave a Comment

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