Trust Products

  • Tax Deferred Exchanges – It is possible to effectively “sell” real or personal property held for investment without incurring an immediate capital gains tax on the profit realized. The mechanism for accomplishing this is a tax deferred or “Starker” exchange and Lakeside Bank is now acting as a qualified intermediary (QI) to facilitate these transactions.*
  • Land Trusts – A legal agreement where a trustee is appointed to maintain ownership of a piece of real property for the benefit of another party: namely, the beneficiary of the trust. Land trusts are used by several different types of organizations for several reasons; nonprofit entities use them to hold conservation easements, and corporations and investment groups use them to accumulate large portions of land.

 


*Please consult with your tax advisor.

Tax Deferred Exchanges

It is possible to effectively “sell” real or personal property held for investment without incurring an immediate capital gains tax on the profit realized. The mechanism for accomplishing this is a tax deferred or “Starker” exchange and Lakeside Bank is now acting as a qualified intermediary (QI) to facilitate these transactions.

Briefly, this is how it works. The seller and buyer of property sign a contract with the seller assigning his rights under the agreement to the QI. When the deal closes, the sale proceeds do not go to the seller but to the QI which holds them until the seller tells it what property he intends to acquire (which he must do within 45 days) and actually closes on the purchase of replacement property (which he must do within 180 days). The QI then releases the funds to make the purchase.

If all of the rules are carefully followed, the Internal Revenue Service will treat the transaction as a qualifying exchange and not consider it a taxable event.

Why A Tax Deferred Exchange?

  • You may use your entire (not tax reduced) equity in that property you are selling to purchase replacement property.
  • You may reduce operational headaches by replacing several properties with a potentially more profitable one.
  • You may diversify your real estate holdings by replacing one greatly appreciated property with several smaller ones.
  • You may change the “mix” of property types in your real estate portfolio without immediate tax consequences.
  • Your circumstances may have changed making the holding a now remote property less advantageous than replacing it with one closer.
  • You may replace a once fast appreciating but now stagnant property with one that has a stronger potential for future income and equity growth.
  • You may “swap” one property for another without the need for working out the logistics of doing an exchange simultaneously.

Anyone owning substantially appreciated investment property should seriously consider utilizing a deferred exchange when the time comes to sell it, and anyone considering a tax-deferred exchange should call Lakeside Bank.

Download a copy of Lakeside Bank’s Starker Exchange brochure.

Download Lakeside Bank’s Tax Deferred Exchange forms:

  • Exchange Agreement
  • Relinquished Property Contract Rider
  • Replacement Property Contract Rider

Please consult with your tax advisor.

Land Trusts

A legal agreement where a trustee is appointed to maintain ownership of a piece of real property for the benefit of another party: namely, the beneficiary of the trust. Land trusts are used by several different types of organizations for several reasons; nonprofit entities use them to hold conservation easements, and corporations and investment groups use them to accumulate large portions of land.

Download Lakeside Bank’s Land Trust forms: