Recent Quote in Property Swap Regulation Article

Last Friday, an article titled "After Investors Lose Millions, Property Swaps Face Regulation" was released by Investor's Business Daily. Joe Gose, a freelance reporter, contacted some Qualified Intermediaries for comments on the Wall Street Reform and Consumer Protection Act that was approved by the House in December.

As I had previously commented here on the CFPA bill, he contacted me for comments. A previous blog entry I wrote stated some concerns about giving this new "super agency" sweeping and ill-defined powers that mandated who - and what - financial products can be offered to consumers. When Mr. Gose called and left a voice message, it seemed apparent he was intent on a certain "angle". His questioning were clearly fixed on writing an article that painted most of the industry against regulation. Nothing could be further from the truth.

This blog is filled with entries that indicate that I believe some regulation is necessary. I was fortunate to be part of a five FEA member committee that worked to ensure responsible legislation in Colorado. Many other FEA members have worked tirelessly to ensure proper 1031 legislation was passed in Nevada, California, Idaho, Washington, Oregon and Maine. As other states like Arizona consider legislation, the FEA is working with these states. The FEA has also worked diligently with federal officials to determine ways to properly regulate the industry on a national level.

My quoted comment to Mr. Gose was simply that I had concerns about the amendment added late in the game by Representative Michael Michaud (D-Maine). The amendment is brief, it is vague and it essentially places all the power to determine any future national 1031 regulation in the hands of a newly-formed CFPA Director. The bill contains no provision for public input or industry feedback in determining any planned regulation.

I was dissapointed to be incorrectly quoted as President of 1031 Corp and to read that our firm was "hardly clamoring for federal oversight". First, had the writer done some proper research, he would have found that our name is 1031 Corporation. Another Pennsylvania FEA member firm, Joe, is called 1031 Corp. It's also interesting that he picked our firm - one that is owned by a financially-sound bank, holds investor client funds in a segregated bank account, maintains a $25 M fidelity bond and is audited and regulated already by the FDIC, external and internal auditors - as somehow against consumer protection.

So, what's the reason/motivation for the incorrect quotes, Joe?

Colorado Conservation Easement Fees Decrease

Last week, the Colorado Division of Real Estate announced a decrease in the fees for certification of a conservation easement. The new cost of a conservation easement appraisal decreased from by $80 and a certification for land trusts and local governments came down by $1,000.

Because of previous overvalued land, which resulted in unwarranted distribution of tax credits, Colorado law now mandates that all land trusts holding easements be certified and all appraisals where a credit is requested be reviewed by the state's Division of Real Estate. The division reduced the fees from last year's amounts to ensure that smaller land trusts can afford to participate and to encourage donations.

Under conservation easements, landowners agree not to develop property that is agricultural or contains scenic vistas or wildlife habitat in exchange for receiving a state tax credit. The easement restricts the landowner to land uses that are compatible with long-term conservation and environmental values. The Colorado program is run exclusively through certification fees assessed on land trusts and the easement appraisal submissions.

The Colorado Real Estate Division reports that, as a direct result of the new law, credits claimed were cut in half - thus saving the state over $50 million.

The sale of a conservation easement is "like kind" to real estate and could qualify for eligibility as a 1031 exchange. Proceeds from the sale of a conservation easement could then be exchanged into additional land or any other investment property held for productive use. If you are contemplating a conservation easement sale, please contact 1031 Corporation for further information on how to defer taxes on that sale.

1031 & self-directed IRA class offerings in Phoenix

1031 Corporation will once again team up with Entrust Arizona for our three hour class Tax Deferred Real Estate Investing (AZ course #C0149) next Thursday January 14th and Friday, January 15th in Phoenix. I, along with Timarie McClendon of Entrust, will provide three hours of instruction on how you might benefit with tax savings on your real estate investments.

Both classes are offered from 10 AM to 1 PM and a free lunch (courtesy of Magnus Title) will be provided. The class on Thursday will be at Realty Executives' 36th and Campbell office. There is a $15 fee for attendees that are not Realty Executives agents. HomeSmart is hosting a class on Friday, January 15th that is also open to real estate professionals and investors. There is no fee for that class.

This is an educational seminar and not a marketing pitch. We benefit by getting our name out and you benefit from getting educated on 1031 exchanges and self-directed IRAs. The class is accredited by the Arizona Department of Real Estate for three (3) hours Legal Issues Continuing Education for Arizona licensed real estate professionals.

If you or someone you know is interested in learning about ways to invest in real estate on a tax-deferred basis, please encourage them to join us. It's credit toward your license renewal, a good education and a free lunch. Can't beat that deal!

Please contact Shari Griffin at 480.329.1335 or by emailing her at shari.griffin@magnustitle.com if you would like to attend. We look forward to seeing you there!