COLDWELL BANKER MARYL REALTY PRICE REDUCED! Kailua Kona • Queen Ka‘ahumanu & Henry St. #203 Offi ce # (808) 331-8200 /Toll-Free # (800) 845-7559 View Current Listings at ColdwellBankerMaryl.com Offi ce License # RB-16961 MAHUAHUA PLACE - KILOHANA Large 4 bedroom, 2.5 bath home in popular Kilohana subdivision. Over-sized garage with additional storage, A/C, solar hot water heater & fully landscaped yard. Leanna Flem, RS-61159 (808) 895-3157 $649,900 601727 KONA PARADISE, BOKI ROAD 3 bedroom, 2 bath, turnkey, furnished home. Cool elevation, vaulted ceilings and a wrap-around lanai. 180 degree, breathtaking ocean views. Tropical landscaping with lots of fruit trees. Steven Meyer, RS-69886 (808) 936-1946 $434,888 601030 KEOPUKA MAKAI This 3 bedroom, 2.5 bath home is currently one of only a few available for sale in Kealakekua. Large covered lanai, fenced yard. It’s move-in ready, no upgrades needed. Dylan Nonaka RS-64242 (808) 937-8382 $590,000 604746 KOHANAIKI Three acres of privacy plus ocean views from this 3 bedroom, 3 bath home with a large covered lanai. Perfect elevation, and plenty of room to grow coffee, fruit trees, etc. Dylan Nonaka RS-64242 (808) 937-8382 $719,000 604022 KONA PACIFIC Spacious corner unit in popular “C” Building with ocean views. Walking distance to the beach. Turnkey, furnished, ready to move right in! Kona Carla Womack, RS-61019 (808) 896-6768 $379,000 293094 KONA PARADISE - HUNA KAI ROAD 3 bedroom, 2 bath home on Huna Kai Road. 1,476 square foot home, with 7,500 of land area! Covered carport. Gail Jamison, RB-32421 (808) 987-5064 Kona Carla Womack, RS-61019 (808) 896-6768 $439,000 297263 • Maryl@Maryl.com WAIKOLOA VILLAGE Spacious 3 bedroom, 2 bath, custom-built, single level home. An abundance of large windows let in lots of natural light. Well-maintained home is move-in ready! Desiree Hillen, RS-77474 (808) 313-0766 $525,000 602840 MAUNA LANI POINT ESTATES Golf course frontage lot provides unobstructed views where you can build a 1 or 2 story home in Mauna Lani Point Estates. Seller has approved plans available. Great opportunity! Bob Hudspeth, RS-55464 (808) 896-3066 $1,695,000 604847 THE GREENS AT WAIKOLOA 2 bedroom, 2 bath, ground-floor, upgraded condo. Turnkey, furnished - currently in a vacation rental pool. Exquisite! Scott Hawkins, RB-22110 (808) 936-8611 $269,000 297938 NEW LISTING! LOKAHI MAKAI Lovely & private 3 bed, 2 bath home with central A/C. Open living design with high, vaulted ceilings, and a large master bedroom with walk-in closet. Fenced, low-maintenance yard. Anabelle Smith, RS-56482 (808) 987-2454 $550,000 604357 8 West Hawaii Real Estate | March 29, 2017 2017 Tax Reform and its Potential Impact on 1031 Exchange In 1921 Congress enacted the Internal Revenue Code 1031, permitting deferral of capital gains and recapture tax on like-kind exchanges. Two primary purposes of the tax were: 1) to avoid unfair taxation of ongoing investments in property and 2) to encourage active reinvestment. These purposes are even more relevant today than they were almost 100 years ago. 2016 was a record year for the number of tax deferred exchanges. However, with the new administration and Congress, the future is uncertain. Repeal would negatively affect the economy and result in a decrease in real estate transactions. This popular investment tool enhances purchasing power and encourages taxpayers to repeatedly invest in real estate. “When investors or businesses structure their asset sale and replacement purchases as 1031 Tax- Deferred Exchanges, they can defer paying capital gains and recapture taxes,” explained Jennifer Keen, Executive Vice President for Investment Property Exchange Services, Inc. (IPX1031®). “The 1031 Exchange is a powerful tool to re-invest profits into newer, more productive property, stimulating business and economic growth.” However, it is possible that 1031 Exchanges could be repealed or limited if they are included in upcoming tax reform bills. IPX1031 Exchange Inc. Tax Reform Blog reports that The House Republican Blueprint for Tax Reform, called “A Better Way” is expected to be the model for tax reform in 2017. The proposal pairs 100 percent immediate expensing with unlimited loss carry forward for all tangible and depreciable personal property assets and real estate improvements, except land. The proposal would also eliminate business interest expense deduction. While the proposal does not repeal Section 1031, neither does it clearly preserve the provision. Mike Drutar, REALTOR® Broker and President of the West Hawaii Association of REALTORS® explained; “I’ve worked with several clients who used a 1031 Exchange to re-invest in real estate. Some of my investor clients would not sell, and then buy, if they could not defer the capital gains tax on their sale property. Our market here in Hawaii has more investor buyers and sellers than in many parts of the country, and the availability of this program has a real impact on our transactions.” IPX1031 Investment Property Exchange Services, Inc. notes, “The last major tax reform was in 1986. At that time, Congress repealed the ability to take passive tax losses in real estate. An unintended consequence of this change was the subsequent real estate recession and the demise of the savings and loans industry. This eventually tipped the country into the recession of the early ‘90s. Section 1031 is bigger than passive losses. In some U.S. markets, real estate brokers claim that 1031 Exchanges touch at least 45 percent of the real estate investment transactions. In addition to real estate, 1031 Exchanges are used on personal property such as cars, trucks, farm machinery, heavy equipment, airplanes, rail cars, boats, art and collectibles, and business asset trade-ins, among others. Eliminating the option of structuring transactions as 1031 Tax-Deferred Exchanges would not only cause a sharp drop in these transactions, but the additional business and services generated from the 1031 transactions would fall as well. Ernst & Young, LLP released a macro-economic study on the impact of repealing or limiting 1031 exchanges in 2015 finding that GDP would be reduced by approximately $8.1 billion per year.” Current events in Washington, D. C. move quickly and are sometimes hard to understand. Stay informed and contact your REALTOR® with questions on how your personal property investment plans may be affected with the tax reform. This information has been provided by West Hawaii Association of Realtors, a professional association of real estate licensees primarily spanning the West Hawaii area of Hawaii Island.
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