Capital gain – Kat Masters http://katmasters.com/ Tue, 21 Sep 2021 22:12:00 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://katmasters.com/wp-content/uploads/2021/06/icon-2021-06-25T173039.237-150x150.png Capital gain – Kat Masters http://katmasters.com/ 32 32 Debt financing and timing of farmland purchases • farmdoc daily https://katmasters.com/debt-financing-and-timing-of-farmland-purchases-farmdoc-daily/ https://katmasters.com/debt-financing-and-timing-of-farmland-purchases-farmdoc-daily/#respond Tue, 21 Sep 2021 22:12:00 +0000 https://katmasters.com/debt-financing-and-timing-of-farmland-purchases-farmdoc-daily/ Yields from agricultural land have averaged around 10%, especially when holding periods exceed 20 years. Even with this 10% average return, financing farmland is difficult because capital gains make up a large part of the total return. There is little reason to expect this situation to change in the future. Cash rents and land prices […]]]>

Yields from agricultural land have averaged around 10%, especially when holding periods exceed 20 years. Even with this 10% average return, financing farmland is difficult because capital gains make up a large part of the total return. There is little reason to expect this situation to change in the future.

Cash rents and land prices

Figure 1 shows the average cash rents and farmland prices for the state of Illinois. In recent years, these values ​​have been reported by the National Agricultural Statistics Service (NASS), an agency of the US Department of Agriculture. As shown in Figure 1, cash rents and farmland prices increased in 2021. Cash rents increased from $ 220 per acre in 2020 to $ 227 per acre in 2021. Farmland prices have grown from $ 7,300 in 2020 to $ 7,900 in 2021. Both cash rents and land prices are expected to continue to rise, with reports from other sources suggesting substantial increases approaching. and exceeding 20% ​​for the year 2021 to 2022 (see agricultural doc agricultural land outlook webinar).

As with all assets, the total return on farmland has two components: current returns and capital gains. Current yields are based on the annual cash yield of agricultural land. Rent in cash is a measure of the current performance of farmland ownership. On a percentage basis, the current yield is equal to the cash rent divided by the price of farmland. In 2021, the average cash rent of $ 227 divided by the average land price of $ 7,900 is 2.8%. Note that this is a gross return and not a net return. Property costs must be subtracted to get a net return. A large annual expense is property tax, while other property costs such as fertility or drainage tiles are not likely to be incurred each year. According to Illinois Farm Business Farm Management, property taxes are on average $ 52 per acre in Illinois in 2020. Factoring in property taxes results in a reduction in the current yield in 2021 from 2.8% to 2.00%. 2%. Overall, accounting for property tax likely reduces current returns by 0.5%

Figure 2 shows the current yields on farmland from 1970 to 2021. A close relationship between current yields and Treasury rates is expected, as Treasury rates represent the current return on alternative financial investments (see farmdoc Daily, March 30 2018). The current yields and rates on 10-year Treasury bills follow each other closely, except for the late 1970s and early 1980s. Treasury rates rose in the early 1980s due to inflation. At the same time, land prices have increased, causing current yields to decline as a percentage of land prices. During the agricultural financial crisis of the mid-1980s, the fall in land prices again made the current yield and the 10-year rate converge, and have since largely remained strongly correlated. Over the entire period 1970-2021, current yields averaged 6%. Since 2010, current yields have averaged 3% of the price of agricultural land.

Capital gains represent changes in the value of land over time. From 2020 to 2021, land prices went from $ 7,300 to $ 7,900, an increase or a capital gain of $ 600. Expressed as a percentage, the capital gain in 2020 is 8.2% (0.082 = $ 600 change / $ 7,300). This capital gain is important to monitor from the point of view of the return on investments, but it represents in particular an unrealized capital gain unless the land is sold.

Capital gains averaged 6% from 1970 to 2020. There are time trends in capital gains (see Figure 3), which follow changes in farmland. Land prices increased significantly during the 1970s, resulting in high capital gains. In the mid-1980s, land prices fell, leading to capital losses. Capital gains averaged about 5% per year from 1989 to 2004. Land prices increased in most years from 2006 to 2014, resulting in significant capital gains during those years. Land prices remained stable and fell from 2014 to 2020, resulting in small and negative capital gains.

The total yield of farmland is equal to the current yield plus the capital gain. Over the entire period, the total return reached almost 11%, with current returns of 5% and capital gains of 6%. There are no general upward or downward trends in total returns. However, the proportion of return coming from current return has declined in recent years as capital gains have increased.

Financing of agricultural land

Buying farmland with loan capital is economical as long as the return on assets exceeds the costs of debt. Over time, the yield from farmland has averaged 11%, and there is little reason to expect declines in the future. Currently, agricultural mortgage interest rates are between 4% and 5%. As a result, the use of loan capital to buy farmland is expected to increase the wealth of those who buy farmland over time.

However, financing the purchase of fixed assets will be difficult because a large part of the yield from agricultural land is made up of unrealized capital gains. To illustrate, take the 2021 state of Illinois values ​​of $ 227 per acre in cash rent and $ 7,900 for the land price. A 40% down payment requirement would require a down payment of $ 3,160 in cash, with the remaining $ 4,740 funded. The annual debt payment for $ 4,740 of principal using a 20-year amortization period and 4% interest rate is $ 348. A debt payment of $ 348 is much higher than the rent in cash of $ 227, indicating that financing from other sources will be required to cover deficits in the early years of the purchase. To get a debt payment of $ 227, the down payment would have to be 61%, or $ 4,819 an acre.

Due to low cash positions and negative net cash after financing, young farmers often find it difficult to purchase farmland. Yields from farmland have historically been high enough to warrant recourse to debt, but financing farmland is difficult because much of the yield is capital gain. This difficulty may have worsened in recent years as current yields as a percentage of the price of agricultural land have declined.

Timing of agricultural land purchases

While the total return has averaged almost 11% from 1970 to 2021, the timing of the purchase will affect the average total return. Prices have shown trends over time. By way of illustration, Figure 4 shows the average total return for different holding periods. The blue line shows the average yield from the sale of farmland in 2021 with one purchase in any previous year on the horizontal axis. For example, buying farmland in 1970 and selling in 2021 is marked with a small circle and has a return of 11%. Buying farmland before 2004 and selling in 2021 yields relatively close to 10%. These yields were slightly lower for purchases in the early 1980s, as farmland declined sharply in the mid-1980s. Yet holding for 20 years or more, regardless of the year of purchase, has resulted in a yield close to more than 10%. Agricultural land purchased from 2012 to 2016 and sold in 2021 has a holding period of much less than 20 years. These purchases from 2012 to 2016 had yields of less than 5% because farmland prices experienced declines and then were relatively stable during this period.

Green shows the average yield of a sale in 2014 when buying in the year along the horizontal axis. Compared to a sale in 2021 (blue line), the average yield is higher because the prices of agricultural land were relatively stable from 2014 to 2020.

The red line represents farmland sold in 1987, when farmland prices were lowest in the 1980s. As can be seen, buying farmland in the 1980s and selling in 1987 would have resulted in losses. negative returns. However, buying farmland in the early 1970s and selling in 1987 would have resulted in an average yield of over 10%.

From an income generation perspective, buying farmland in 1984 was the worst possible time to buy farmland. As shown in Figure 5, a purchase in 1984 and a sale before 1988 would have generated negative returns. In contrast, a purchase during this period would have generated an average annual return close to 10% if it had not been sold before the mid-2000s.

Overall, the timing of farmland purchase affects total income. From 1970 to 2021, however, achieving total returns close to 10% was achieved by having relatively long holding periods.

Summary

Farmland has had total returns that exceed debt costs. Yet financing of farmland has been difficult due to the cash flow requirements associated with financing, and much of the income from farmland comes from unrealized capital gains. On the contrary, this situation may have worsened in recent years because current yields as a percentage of land prices have declined.

Holding farmland for relatively long periods generated returns of almost 10% from 1970 to 2021. The timing is important. Overall, buying agricultural land before the land price drops results in low returns, especially if it is not held for a long time. However, it is difficult to predict when land prices may fall.


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New developments of qualified opportunity areas https://katmasters.com/new-developments-of-qualified-opportunity-areas/ https://katmasters.com/new-developments-of-qualified-opportunity-areas/#respond Mon, 20 Sep 2021 21:43:17 +0000 https://katmasters.com/new-developments-of-qualified-opportunity-areas/ In this article, we’ll explore some of what you need to know now about Qualified Opportunity Zones (QOZs), which arose with the not-so-distant Tax Cuts and Jobs Act of 2017. First, the goal of QOZs is to encourage investment in designated economic zones. The tax incentive encourages the reinvestment of short and long term capital […]]]>

In this article, we’ll explore some of what you need to know now about Qualified Opportunity Zones (QOZs), which arose with the not-so-distant Tax Cuts and Jobs Act of 2017.

First, the goal of QOZs is to encourage investment in designated economic zones. The tax incentive encourages the reinvestment of short and long term capital gains in these areas.

Such earnings, if reinvested within 180 days, are eligible for a deferral and even a surrender of certain earnings. There have been some extensions to the 180-day rule in the COVID-19 environment (Notice 2020-39, Notice 2021-10).

One of the strategies focuses on selecting long-term gains for deferral, when this releases long-term capital losses to offset short-term capital gains (“Three Years of Opportunity Zones and Outlook for 2021” , bloombergtax.com, 11/20/20; https://news.bloombergtax.com/daily-tax-report/three-years-of-opportunity-zones-and-outlook-for-2021). If the investor was in the program early, it would be possible to forgo up to 15 percent of the taxpayer’s capital gains.

The test for a 15 percent discount is whether the investment will be held for seven years until December 31, 2026. As we write in 2021, it is possible that even new investments may be eligible for a discount. 10 percent of earnings under the rule that asks if the investment has been held for five years as of December 31, 2026.

This key date is only a little over five years away as we write in the latter part of 2021. As a result, investments must be made by the end of 2021 in order to qualify for a payout discount. to any degree under the law as it is currently drafted.

Capital gains eligible for deferral include stock market capital gains and real estate capital gains. The idea is that the investments go into defined areas of activity. The source of capital gains can be varied.

The deferred gain, unless you follow the 15% or 10% gain discount rules, is reintegrated into taxable income as of December 31, 2026. One of the general issues here is the concentration of income over one year, 2026. , with the exception of intermediate sales which might minimize deferral and negate the gain forgiveness aspects of the rules. For investments held for 10 years, there is no prospect of taxable gain.

The new 2021 investments therefore have three main advantages:

  • deferral of initial gain
  • some prospect that 10% of the old reinvested gain will be forfeited if the new investment is held for five years by the end of 2026
  • no gain on the investment per se assuming very long-term ownership

Keep in mind that investing after 2021 will not access the 10 percent cash back rebate incentive that requires five years of ownership by the end of 2026. Not surprisingly, there is considerable discussion about liberalization of the law as currently drafted (three proposals are noted at “Legislation would expand OZ incentive by creating subsequent designation rounds”, Opportunity Zone Resource Center, novoco.com, 8 / 10/21).

Recent developments

There have been concessions of time relief from the IRS regarding various detailed rules: 30-month Substantial Improvement Period, 90% Investment Standard, Working Capital Safe Harbor, and Period of 12-month reinvestment (Notice 2021-10).

The IRS has confirmed that the 2020 Census changes do not affect the previously established boundaries of the Qualified Opportunity Zones, which were based on the 2010 Census (Announcement 2021-10). The IRS has issued some retroactive corrections to the final QOZ regulation, TD 9889, most notably the Working Capital Safe Harbor Rule. The corrections come into force on August 5, 2021 and are applicable from January 13, 2020 (Documents FR 2021-16663 and 2021-16664, 86 FR 42715, 42716; https://www.federalregister.gov/documents/2021/08 / 05).

In January 2021, the IRS released the latest Form 8996, “Qualified Opportunity Fund”. The IRS has issued a correction regarding areas of opportunity qualified in the 2020 Instructions for Form 8949 Sales and Other Dispositions of Capital Assets (“Corrections to the 2020 Instructions for Form 8949,” IRS.gov).

The IRS issued a timely filing relief decision to an LLC self-certifying its qualified opportunity fund status (PLR 202116011, 4/23/21; see also PLR 202103013, 1/22/21). The United States Government Accountability Office has requested more data and reporting on the performance of areas of opportunity (“Areas of Opportunity: Improving Oversight Needed to Assess Tax Expenditure Performance,” GAO-21-30 , gao.gov, 9/11/20).

Protecting the QOF Incentive – A Perspective

Are the rules changing? In the many discussions of the Biden administration’s “green paper” on proposed legislation, we don’t hear that the QOZ provisions are being changed.

There are many provisions generally focused on raising capital gains taxes, especially for the rich and the less rich who are having a good year. There is a certain prospect that our traditional rule of increase on death will be eliminated or watered down, and even a certain prospect that death will trigger a gain. Similar exchanges of investment real estate may even become taxable.

Higher taxes on capital gains can bode well as they encourage the deferral of gains through the QOF. Yet there is the problem of “income pooling”. The postponement of QOZ turns around at the end of 2026, which creates the prospect of a significant capital gain in one year (Sec. 1.1400Z-2 (b) (1) (B)). The Biden proposal, among others, suggests an improved tax on large gains that could discourage investment in QOZs.

What is the outlook for the Biden proposals imposing a particularly large earnings tax in 2026, and what impact could such a tax have on QOZ investments?

In the author’s opinion, when the topic is the increase in the earnings tax, one should consider possible exceptions or special rules for large QOZ deferrals turning in one year. Otherwise, large gains tax proposals can discourage QOZ investments.


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My father wants to give me his parking space. Do I owe capital gains tax? | Capital gains tax https://katmasters.com/my-father-wants-to-give-me-his-parking-space-do-i-owe-capital-gains-tax-capital-gains-tax/ https://katmasters.com/my-father-wants-to-give-me-his-parking-space-do-i-owe-capital-gains-tax-capital-gains-tax/#respond Mon, 20 Sep 2021 06:01:00 +0000 https://katmasters.com/my-father-wants-to-give-me-his-parking-space-do-i-owe-capital-gains-tax-capital-gains-tax/ Q My father is considering giving me the parking space he owns near his home but wants to know if capital gains tax has to be paid. Although it was purchased the same year as his house – and from the same developer – it was optional and there is a deed for the property […]]]>

Q My father is considering giving me the parking space he owns near his home but wants to know if capital gains tax has to be paid.

Although it was purchased the same year as his house – and from the same developer – it was optional and there is a deed for the property and a deed for the parking space.

I’m assuming capital gains tax should be paid on the £ 12,300.00 allowance. I think the tax would be the same as a rental property ie 18% at the lower rate and 28% at the higher rate, but I’m not sure. Could you please confirm that this is the case?
GL

A It is indeed true that with the exception of capital gains realized on your main residence, capital gains tax (CGT) is levied on most other profits made on the sale of land and of buildings. Tax is levied at 18% (if you are a base rate taxpayer) and 28% if you pay income tax at the higher rate.

You are also correct that the CGT allowance is £ 12,300 for the 2021-2022 tax year, like the last tax year.

But your thinking can be somewhat skewed if you think that the CGT allowance is applied to the selling price of the asset when it is sold because it is not. Rather, it is charged against your taxable earnings for the tax year. A taxable gain is obtained by subtracting the purchase price of a property from its selling price or, in the case of a donation, from its market value. You then subtract the costs associated with acquiring and disposing of the asset, such as legal and appraisal fees and property tax on stamp duties.

So if your dad bought the parking space for £ 15,000, gave it to you at a market value of £ 25,000 (to be determined by a qualified independent appraiser) and spent £ 3,000 on legal fees and valuation, his taxable gain of £ 7,000 would be well within the limits of his CGT allowance of £ 12,300 and no CGT would be due.

If, however, I am so disconnected from the value of the parking spaces and the taxable gain was over £ 12,300, the portion of the taxable gain over £ 12,300 would be charged at the CGT rate applicable to your tax situation. father. . The tax should also be paid within 30 days of the disposal of the asset.

If your father left the land to you in his will rather than giving it to you now, the CGT would not be due because the inheritance tax outweighs the CGT after the death of the owner of the property.

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Managed Futures Improvements: What We’ve Seen So Far https://katmasters.com/managed-futures-improvements-what-weve-seen-so-far/ https://katmasters.com/managed-futures-improvements-what-weve-seen-so-far/#respond Sun, 19 Sep 2021 14:00:13 +0000 https://katmasters.com/managed-futures-improvements-what-weve-seen-so-far/ By Matthew Aydemir, Tree of Wisdom. We made significant changes to our WisdomTree Managed Futures Strategy Fund (WTMF) in June, with the goal of improving risk-adjusted performance. Although we are hesitant to draw too many conclusions from short-term results, we can now provide some remarks on what we observed in post-revamp WTMF. Fund performance (post-recast) […]]]>

By Matthew Aydemir, Tree of Wisdom.

We made significant changes to our WisdomTree Managed Futures Strategy Fund (WTMF) in June, with the goal of improving risk-adjusted performance. Although we are hesitant to draw too many conclusions from short-term results, we can now provide some remarks on what we observed in post-revamp WTMF.

Fund performance (post-recast)

Naturally, the focus has been on the performance of the Fund since changes were made to the model.

This quarter has been relatively slow for the managed futures industry, as evidenced by the recent drop in the SG Trend Index (NEIXCTAT), an equally weighted index of 10 of the top commodities trading advisers ( CTA) that follow trends. Despite a lackluster quarter for the managed futures space, the revamped WTMF retained and added to last year’s gains. The Fund also outperformed the benchmark at NAV while exhibiting lower volatility. The comparison is best illustrated in the figure below.

Figure 1: Performance of the WTMF vs SG index

Standardized performance for WTMF is available here.

Another useful point of comparison is the previous WTMF model. In the figure below, we show the old model reconstructed compared to the live model. While the rebuild isn’t a perfect replica of the performance of the old Fund, it gives us a reasonable idea of ​​what we could expect from the old model over the past few months.

Figure 2: Fund return compared to the old model approximation (post-reorganizations)

For definitions of terms in the table, please see the glossary.

As we have mentioned in previous blog posts, one of the additions to the Fund was a tactical equity model. Although this is only a few months of history, the strong performance of equities during this period boosted the performance of the Fund. The tactical equity model also reduced the volatility of the Fund during periods of falling commodities.

The main takeaway here is that the shifts had a positive impact on both yield and volatility in the last quarter.

Current positioning

The September rebalancing (effective 9/21/21) saw a shift from net long exposure to short exposure on energy, particularly oil. Despite this, the Fund remains net long on commodities.

Rates remain low, resulting in a net long position on our rate contracts. The currency pattern has been USD long for the past two months and remains long this month. After a strong performance in August, the tactical equity component increased exposure from 32% to the full nominal weighting of 40%. The Fund’s positioning for September 2021 is summarized in the following table.

For a current list of funds, click here.

Integration of Managed Futures in a portfolio

One of the main uses of managed futures is for diversification. A more traditional approach has been to incorporate a fixed income component. But in a low interest rate environment, the contribution of a bond component is limited.

In addition, given the low rates, it is questionable to what extent a bond component will be able to hedge equity declines in the future. Incorporating managed futures into a portfolio can further diversify a portfolio’s risk factors by providing long / short exposures to a variety of asset classes. WTMF invests in a wide range of uncorrelated assets spanning stocks, commodities, currencies and rates, making it an excellent candidate for portfolio diversification.

In our previous blog post, we described the benefits of combining managed futures with our effective core fund. The result is a capital efficient portfolio with a strong risk-adjusted return profile. Given the strong performance of WTMF’s post-reorganizations, it may make even more sense to build a capital efficient portfolio in this way. It is probably still too early to draw too many conclusions from the data, but it will be exciting to see how the fund’s performance evolves over the year.

Originally posted by WisdomTree on September 17, 2021.


Significant risks associated with this article

WisdomTree shares are bought and sold at market price (not net asset value) and are not individually redeemed by the Fund. Total returns are calculated on the basis of the daily net asset value (NAV) at 4:00 p.m. Market price returns reflect the midpoint of the bid / ask spread at the close of trading on the exchange where the Fund’s shares are listed. Market price returns do not represent the returns you would receive if you were trading stocks at other times.

There are risks associated with investing, including possible loss of capital. An investment in this Fund is speculative, involves a substantial degree of risk and should not constitute the entire portfolio of an investor. One of the risks associated with the Fund is the complexity of the various factors that contribute to the performance of the Fund, as well as its correlation (or non-correlation) with other asset classes. These factors include the use of long and short positions in commodity futures, forward currency contracts, swaps and other derivatives. Derivatives can be volatile and may be less liquid than other securities and more sensitive to the effects of various economic conditions. The Fund should not be used as a proxy to take long positions only (or only short) in commodities or currencies. The Fund could lose significant value during periods when long only indices rise or short only indices fall. The Fund’s investment objective is based on historical price trends. There can be no assurance that these trends will be reflected in future market movements. The Fund generally does not make intra-monthly adjustments and is therefore subject to substantial losses if the market moves relative to the Fund’s established positions on an intra-monthly basis. In markets without sustained price trends or in markets that reverse rapidly or “crash”, the Fund may experience significant losses. As the Fund is actively managed, the ability of the Fund to achieve its objectives will depend on the efficiency of the portfolio manager. Due to the investment strategy of this Fund, it may make higher capital gains distributions than other ETFs. Please read the Fund’s prospectus for specific details regarding the Fund’s risk profile.

Learn more at ETFtrends.com.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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Senate bill to end ETF tax break “unlikely to pass”: CIO https://katmasters.com/senate-bill-to-end-etf-tax-break-unlikely-to-pass-cio/ https://katmasters.com/senate-bill-to-end-etf-tax-break-unlikely-to-pass-cio/#respond Sat, 18 Sep 2021 14:30:30 +0000 https://katmasters.com/senate-bill-to-end-etf-tax-break-unlikely-to-pass-cio/ A Senate Democrat’s proposal to end tax relief for exchange-traded funds is “fairly unlikely to pass,” the chief investment officer and research director of ETF Trends said this week, Dave Nadig, at CNBC’s “ETF Edge”. “I think the odds are pretty low,” Nadig said in an interview Monday. “It’s easy to look at that and […]]]>

A Senate Democrat’s proposal to end tax relief for exchange-traded funds is “fairly unlikely to pass,” the chief investment officer and research director of ETF Trends said this week, Dave Nadig, at CNBC’s “ETF Edge”.

“I think the odds are pretty low,” Nadig said in an interview Monday. “It’s easy to look at that and say, ‘Well, my God, that’s something rich guys take advantage of. It is in fact the small investors who benefit the most. “

Drafted by Senate Finance Committee Chairman Ron Wyden, D-Ore., The bill suggests stopping the tax break on in-kind transactions, allowing ETF managers to sell positions without triggering capital gains taxes for end investors. It would exempt ETFs in tax-deferred retirement accounts.

“It puts an ETF and a traditional mutual fund on roughly the same footing, which means if someone has to sell inside the portfolio, there’s a taxable event,” Nadig said.

Although Wyden said the plan applies to “taxable accounts of the wealthiest investors,” there are many ways they can get tax benefits outside of ETFs, which are “by no means” their primary means of obtaining tax benefits. do it, Nadig said.

“It’s pretty regressive and for that reason I think it’s unlikely to pass,” he said. “But the reason? To try and increase income, obviously.”


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Data for the purchase of mutual funds is entered in form 26AS https://katmasters.com/data-for-the-purchase-of-mutual-funds-is-entered-in-form-26as/ https://katmasters.com/data-for-the-purchase-of-mutual-funds-is-entered-in-form-26as/#respond Sat, 18 Sep 2021 05:01:25 +0000 https://katmasters.com/data-for-the-purchase-of-mutual-funds-is-entered-in-form-26as/ MUMBAI: Can the tax office accept long-term capital gains tax return (LTCG) given by the AUM of mutual funds? – Name withheld on request. Assets under management or assets under management is an indicator of the performance of a mutual fund and its size. This is the total market value of the assets that a […]]]>

MUMBAI: Can the tax office accept long-term capital gains tax return (LTCG) given by the AUM of mutual funds?

– Name withheld on request.

Assets under management or assets under management is an indicator of the performance of a mutual fund and its size. This is the total market value of the assets that a mutual fund manages at any given time.

Investments in mutual funds are generally managed by asset management companies (AMCs). These companies provide a detailed year-end report of transactions that have been entered into by a person as well as a summary of the capital gain or loss suffered by that unitholder. Although the data provided by these fund managers can be trusted, the calculations made by them to arrive at the figures for the gains or losses incurred should be carefully checked before filing the tax return. It is necessary to verify whether the provisions relating to acquired rights, indexation, etc. have been applied correctly or not. This practice is also prevalent throughout the industry.

The Income Tax Service has in the past accepted such returns from AMCs for capital gains verification purposes. In addition, at the individual level, it becomes very difficult to keep the details of the transaction and, therefore, such statements are a reliable source of information. Data for the purchase of mutual funds is also entered in Form 26AS based on records filed by these mutual fund managers with the income tax department.

– Response from Shailesh Kumar, Partner, Nangia & Co LLP. Send your questions to mintmoney@livemint.com

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Bluerock Total Income + Real Estate Fund announces 35th consecutive quarterly distribution at 5.25% annualized rate https://katmasters.com/bluerock-total-income-real-estate-fund-announces-35th-consecutive-quarterly-distribution-at-5-25-annualized-rate/ https://katmasters.com/bluerock-total-income-real-estate-fund-announces-35th-consecutive-quarterly-distribution-at-5-25-annualized-rate/#respond Fri, 17 Sep 2021 20:30:00 +0000 https://katmasters.com/bluerock-total-income-real-estate-fund-announces-35th-consecutive-quarterly-distribution-at-5-25-annualized-rate/ NEW YORK, September 17, 2021 / PRNewswire / – Bluerock Total Income + Real Estate Fund (“TI +”, tickers: TIPRX, TIPPX, TIPWX, TIPLX) ​​paid a third quarter distribution of $ 0.4199 per share, i.e. 1.31% for the quarter, based on the share price of $ 31.99 (A shares) for shareholders registered in the September 16, […]]]>

NEW YORK, September 17, 2021 / PRNewswire / – Bluerock Total Income + Real Estate Fund (“TI +”, tickers: TIPRX, TIPPX, TIPWX, TIPLX) ​​paid a third quarter distribution of $ 0.4199 per share, i.e. 1.31% for the quarter, based on the share price of $ 31.99 (A shares) for shareholders registered in the September 16, 2021. This distribution amount represents an annualized rate of 5.25% * based on the current share price, marking the Fund’s 35th consecutive quarterly distribution. Since its creation in 2012, TIPRX has paid approximately 13 $ per share in total distributions to its shareholders. In addition to these quarterly distributions, TIPRX NAV increased by approximately 28% compared to 25 $ after $ 32 per share (as of 9.16.2021) and has generated an annualized return of 7.92% since inception. As a result of this growth, shareholders who originally purchased a NAV of 25 $/ share will receive a distribution amount at an annual rate of approximately 6.7% based on the amount of their investment.

“In the current era of continued low interest rates where investors are concerned about low yields and the potential loss of capital due to rising rates, TI + has provided over its 9-year history with income. consistent and highly tax-efficient, while significantly preserving net asset value. In addition to the constant 5.25% payout rate, the Fund has generated more than 265 basis points of annual appreciation since its inception, thus meeting the common concerns and objectives of investors for attractive income, tax efficiency. , growth, hedging against inflation and lower volatility and drawdown, ”said Jeffrey Schwaber, CEO of Bluerock Capital Markets. “In addition, we are also proud to report that the Fund has generated a total return of approximately 15% since the end. September 20201 (representing the Covid-led dip) supporting the Fund’s bullish outlook for institutional real estate, particularly in our most convinced and weighted sectors, namely industrial, multi-family and specialty sectors, including life sciences, which have seen substantial year-over-year rent increases to provide both growth and inflation protection, ”Schwaber added.

Since its inception, TI + has achieved its stated goals including current income and capital appreciation as well as low correlation and low volatility to broader markets.

Net assets under management for TI + are approximately $ 3.0 billion from September 16, 2021. TI + currently holds positions in 25 private equity investments and 2 real estate investments in private debt, with underlying assets valued at approximately $ 239 billion (holdings are subject to change at any time and should not be construed as investment advice).2

1 Source: Morningstar Direct, 9.24.2020-8.31.2021

2 For detailed holdings of the Fund, please visit http://bluerockfunds.com/investment-holdings/

TI + A Share Fund Net performance


Performances until 30.30.2021

Performances until 03.31.2021


One year

Five years

Annualized since creation3

YTD

Since inception3

TI + Fund category A

8.43%

6.43%

7.47%

11.74%

7.89%

TI + Class A4 with sales costs max.

2.19%

5.18%

6.74%

5.33%

7.17%

The returns shown are total net returns: expressed as a percentage, the calculation of the total return is determined by taking the price change, reinvesting, if applicable, all distributions of income and capital gains during the period and by dividing by the starting price. Returns greater than one year are annualized.

3 The date of creation of the Fund is October 22, 2012.

4 The maximum sales charge for Class A shares is 5.75%. Investors may benefit from an exemption or reduction in subscription fees.

The performance data cited here represents past performance. Actual performance may be lower or higher than the performance data cited above. The return on investments and the value of capital fluctuate, so shares, when redeemed, may be worth more or less than their original cost. For information on performance at the end of the most recent month, please call toll-free 1-888-459-1059. Past performance is no guarantee of future results.

The fund’s total annual operating expense ratio, gross of any fee waivers or reimbursement of fees, is 2.18% for Class A, 2.93% for Class C, 1.93% for category I and 2.42% for category L. The investment advisor of the Fund has contractually agreed to reduce its fees and / or absorb the expenses of the fund, at least up to January 31, 2022 for class A, C, I and L shares, to ensure that the annual net operating expenses of the fund will not exceed 1.95% for class A, 2.70% for class C and 1, 70% for Class I, and 2.20% for Class L, per annum of the average daily net assets of the Fund attributable to Class A, Class C, Class I and Class L shares, respectively, under reserve for possible recovery by the Fund in future years. Please see the Fund’s Prospectus for more details on the fee waiver. A fund’s performance, especially over very short periods of time, shouldn’t be the only factor in your investment decisions. The fund’s performance and distributions are shown net of fees.

The Bluerock Total Income + Real Estate Fund is a closed-range fund that invests the majority of its assets in institutional private equity real estate securities which are generally only available to institutional investors able to meet the multi-million minimum investment criteria. of dollars. In Q2 2021, the value of the underlying real estate held by the securities in which the Fund is invested is approximately $ 239 billion, including investments managed by Ares, Blackstone, Morgan Stanley, Principal, Prudential, Clarion Partners, Invesco and RREEF, among others. The minimum investment in the Fund is $ 2,500 ($ 1,000 for pension plans) for Class A, C and L shares.

For copies of documents filed by TI + public companies, please visit the United States Securities and Exchange Commission website at www.sec.gov or the company’s website at www. bluerockfunds.com.

About Bluerock Total Income + Real Estate Fund

The Bluerock Total Income + Real Estate Fund offers retail investors access to a portfolio of institutional real estate securities managed by leading fund managers. The Fund seeks to offer a comprehensive real estate portfolio designed to offer a combination of current income, capital preservation, long-term capital appreciation and enhanced portfolio diversification with low to moderate volatility and low correlation to the markets. broader stocks and fixed income securities. The Fund uses an exclusive partnership with Mercer Investment Management, Inc., the world’s leading advisor to endowments, pension funds, sovereign wealth funds and family offices worldwide, with more than 3,300 clients worldwide and over $ 15.0 trillion in assets in consulting.

Investing in the Bluerock Total Income + Real Estate Fund involves risks, including loss of capital. The Fund intends to make investments in several real estate securities which may subject the Fund to additional fees and expenses, including management and performance fees, which could adversely affect returns and could expose the Fund to risk. additional, including lack of control, as further described in the prospectus.

* The Fund’s distribution policy is to make quarterly distributions to shareholders. The level of quarterly distributions (including any return of capital) is not fixed and this distribution policy is subject to change. Shareholders should not assume that the source of a distribution from the Fund is net income. All or part of the distributions is a return of capital based on the nature of the distributions received from the underlying interests, primarily real estate investment trusts. The final determination of the source and tax characteristics of all distributions will be made after the end of each year. Shareholders should note that the return of capital will reduce the tax base of their shares and potentially increase the taxable gain, if any, on the disposition of their shares. There can be no assurance that the Company will continue to make distributions or that they will continue at these rates. There can be no assurance that an investment will be effective in achieving the Fund’s investment objectives, generating positive returns or avoiding losses.

Limited liquidity is provided to shareholders only through the Fund’s quarterly repurchase offers for no less than 5% of the outstanding Fund shares at net asset value. There can be no assurance that shareholders will be able to sell all of the shares they wish in a quarterly tender offer. Quarterly redemptions by the Fund of its shares will generally be funded from available cash or sales of portfolio securities. Selling securities to fund redemptions could reduce the market price of those securities, which in turn would reduce the net asset value of the Fund.

Investors should carefully consider the investment objectives, risks, fees and expenses of the Bluerock Total Income + Real Estate Fund. This and other important information about the Fund is contained in the prospectus, which can be obtained online at bluerockfunds.com. The prospectus should be read carefully before investing.

The Bluerock Total Income + Real Estate Fund is distributed by ALPS Distributors, Inc (ALPS). Bluerock Fund Advisor, LLC is not affiliated with ALPS.

SOURCE Bluerock Total Income + Real Estate Fund


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Can I invest mutual fund profits in apartments to save income tax? https://katmasters.com/can-i-invest-mutual-fund-profits-in-apartments-to-save-income-tax/ https://katmasters.com/can-i-invest-mutual-fund-profits-in-apartments-to-save-income-tax/#respond Fri, 17 Sep 2021 06:40:34 +0000 https://katmasters.com/can-i-invest-mutual-fund-profits-in-apartments-to-save-income-tax/ Question: As you mentioned in your article, long term capital gains (LTCG) resulting from the sale of any fixed asset other than a residential house can be claimed as exempt under the u / s section 54F if the proceeds of the sale are invested in a property of a dwelling house, subject to the […]]]>

Question: As you mentioned in your article, long term capital gains (LTCG) resulting from the sale of any fixed asset other than a residential house can be claimed as exempt under the u / s section 54F if the proceeds of the sale are invested in a property of a dwelling house, subject to the time limits mentioned therein. This section is silent on the type of long-term capital envisaged when it says “the capital gain results from the transfer of any long-term fixed asset, which is not a dwelling house “I have a significant LTCG from debt mutual funds in the last fiscal year and I will also have the same LTCG in the current fiscal year. In view of the above, I would like to know if I can reinvest the LTCG earned on a debt fund in a residential apartment in the next 2 years. I also want to know if I can claim the refund of the tax paid on LTCG for YY 2021-22 in the future. – P. Acharya

Answer: For the purposes of claiming the Section 54F exemption, all fixed assets, except a dwelling house, are covered, for which a separate Section 54 exemption is available. . Thus, the long-term capital gains exemption on the sale of all fixed assets, including debt funds, can be claimed under Section 54F by investing in residential property within specified time frames.

Please note that for the purposes of claiming the long-term capital gains exemption on the sale of a residential property, you are required to invest only the amount of the calculated capital gains, after applying the ‘residential property cost inflation index under section 54 while for claiming exemption for long-term capital gains resulting from the sale of any property other than residential property under of Article 54F, you are required to invest not the amount of the capital gains but the entire amount of the net sale consideration received. Thus, if you wish to benefit from the exemption provided in Section 54F, you will have to invest the proceeds of the redemption of the debt funds in a residential property.

If you have already paid tax on your long-term capital gains, the law does not provide for a refund of this tax even if you buy a house within the allotted time. However, if you plan to buy / build a property within the prescribed time frame, you can deposit the amount to be invested into a bank account to be opened as part of a capital gains scheme account with a bank. authorized and request the exemption when filing. the ITR to file for the 2021-2022 tax year. Even if you have already deposited the ITR, you can revise the ITR and request the refund if you deposit the amount in the above account before September 30, 2021, which is the extended deadline for filing the ITR for fiscal 2020. -2021.

Balwant Jain is a tax and investment expert and can be reached on jainbalwant @ gmail and @jainbalwant on Twitter

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Rollover transaction completed on September 15, 2021 https://katmasters.com/rollover-transaction-completed-on-september-15-2021/ https://katmasters.com/rollover-transaction-completed-on-september-15-2021/#respond Thu, 16 Sep 2021 16:50:00 +0000 https://katmasters.com/rollover-transaction-completed-on-september-15-2021/ VANCOUVER, BC / ACCESSWIRE / September 16, 2021 / Maple Leaf 2020-II Short Term Flow-Through Limited Partnership – National Class and Quebec Class (the “Corporation”) is pleased to announce that on September 15, 2021, the Partnership has completed its Rollover Transaction whereby the assets of the Partnership were transferred to the Maple Leaf Resource Class […]]]>

VANCOUVER, BC / ACCESSWIRE / September 16, 2021 / Maple Leaf 2020-II Short Term Flow-Through Limited Partnership – National Class and Quebec Class (the “Corporation”) is pleased to announce that on September 15, 2021, the Partnership has completed its Rollover Transaction whereby the assets of the Partnership were transferred to the Maple Leaf Resource Class (CDO103) mutual fund (the “Resource Mutual Fund”) in exchange for Series A shares of the Resource Mutual Fund.

NATIONAL CLASS (CUISP:56532P202) REVERSAL DETAILS
The final net asset value per National Class Unit was $ 31.86. The Resource Mutual Fund Series A shares were issued at a net asset value of $ 3.88902 each. As a result, each National Class Corporate Unitholder received 8.19282 Resource Mutual Fund Shares for each National Class Corporate Unit held.

QUEBEC CATEGORY (CUSIP: 56532P103) REVERSAL DETAILS
The final net asset value per Quebec Class Corporate Unit was $ 25.81. The Series A Resource Mutual Fund shares were issued at a net asset value of $ 3.88902 each. As a result, each Quebec Class Corporate Unitholder received 6.63769 shares of Resource Mutual Funds for each Quebec Class Corporate Unit held.

Shares of Resource Mutual Fund will be deposited in investors’ brokerage accounts and investors may elect to switch to the Maple Leaf Income Class (CDO102) mutual fund (the “Income Mutual Fund”) free of charge. The mandate of the income mutual fund is to provide preservation of capital, lower volatility, long-term growth and income.

Investors should note:

  • Trades and trades can only be executed after the broker has processed the rollover trade and the Resource Mutual Fund shares appear in your account. It typically takes 2 to 5 days for dealers to process the rollover transaction.

  • Shares of Resource Mutual Fund and Income Mutual Fund are qualified investments for RRSPs, RRIFs, RESPs, DPSPs, RDSPs and TFSAs.

  • No fees will be charged for switches to the income mutual fund.

  • Redemption of shares of Resource Mutual Fund for cash or replacement by Income Class Mutual Fund will result in capital gains tax.

Please contact your Investment Advisor for advice and assistance if you wish to switch to an income mutual fund.

ABOUT THE MAPLE LEAF
Maple Leaf is an independent private company whose executive members have participated in the formation of more than $ 500 million in capital based on energy and resource-based alternative investment products for Canadian resident investors.

ADDITIONAL INFORMATION
Additional information about the mutual fund is available in the simplified prospectus, annual information form, management reports of fund performance and financial statements of the mutual fund. You can obtain a copy of these documents at your request and at no cost by calling toll-free at 1-866-688-5750, or from your financial advisor, or by emailing info@MapleLeafFunds.ca, or by downloading them. at www. MapleLeafFunds.ca. These documents and other information about the mutual fund will also be available on SEDAR (the electronic document analysis and search system established by the Canadian Securities Administrators) at www.sedar.com.

For more information
For more information, please contact Hugh Cartwright, President

MAPLE LEAF TRANSFER PROGRAMS

Phone. : 604.684.5742
Toll free: 866.688.5750

Email: info@MapleLeafFunds.ca
The Web: www.MapleLeafFunds.ca

This press release is provided for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy the securities. No securities regulatory authority has ruled on the merits of the actions of the Resource Mutual Fund and the Income Mutual Fund and to claim otherwise is an offense. Commissions, trailing commissions, management fees and expenses can all be associated with investing in mutual funds. Please read the simplified prospectus and consult your financial advisor to determine if these investments are suitable for you. Mutual funds are not guaranteed, their values ​​change frequently and past performance may not be repeated.

THE SOURCE: Maple Leaf 2020-II Short Term Flow-Through Limited Partnership

See the source version on accesswire.com:
https://www.accesswire.com/664384/Rollover-Transaction-Completed-September-15-2021–Maple-Leaf-Short-Duration-2020-II-Flow-Through-LP-National-Quebec-Class


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How to deal with tax surprises on cryptocurrency and NFT investments https://katmasters.com/how-to-deal-with-tax-surprises-on-cryptocurrency-and-nft-investments/ https://katmasters.com/how-to-deal-with-tax-surprises-on-cryptocurrency-and-nft-investments/#respond Tue, 14 Sep 2021 19:43:22 +0000 https://katmasters.com/how-to-deal-with-tax-surprises-on-cryptocurrency-and-nft-investments/ By: Christopher Rogers, Senior Tax Partner, Capital Fund Law Group NFTs (non-fungible tokens) are all the rage and these are the trends in the crypto economy. Although this is a relatively new phenomenon, they continue to gain popularity. With this, a new generation of investors has entered a world that, for the most part, has […]]]>

By: Christopher Rogers, Senior Tax Partner, Capital Fund Law Group

NFTs (non-fungible tokens) are all the rage and these are the trends in the crypto economy. Although this is a relatively new phenomenon, they continue to gain popularity. With this, a new generation of investors has entered a world that, for the most part, has been seen as untouchable and esoteric. People are now investing their money in these NFTs, and they are changing the value of luxury items such as artwork and collectibles, as well as bespoke content that includes videos, music, GIFs and Moreover. Also, it has been an education for people who invest in crypto as they look for innovative ways to increase their net worth. Those who invest in NFTs and cryptocurrency transactions, however, may not be aware of the tax rules and implications that govern this new class of transactions.

Tax implications of investing in Bitcoin and other cryptocurrencies

Bitcoin, or any other cryptocurrency, is subject to an array of tax implications. Depending on the type of transaction carried out, this will determine whether it is considered a taxable event.

Investors who trade a coin for a capital gain are a taxable event. IRS views cryptocurrency as goods, no currency (although note that the IRS has provided specific guidance on taxing cryptocurrency if it is used to pay wages, which is outside of this article). Regardless of how it is used, investors will owe taxes if the value of the cryptocurrency is more than what you bought.

Each exchange of one coin for another is a taxable event, and any difference between the taxpayer’s base in that coin and the price of the new coin is taxable, usually as capital gains. For example, if the investor bought $ 20,000 worth of ETH in January 2020 and traded that $ 20,000 of ETH for $ 30,000 of BTC in September 2020, the investor would have taxable capital gains of 10 $ 000.

The use of cryptocurrency to purchase goods and services is also considered a taxable event. Even if you buy a cup of coffee from a store that accepts crypto, it is like simply selling crypto trading, stocks, or bonds. The IRS website states that “the use of virtual currencies to pay for goods or services. . . generally has tax consequences that could result in a tax liability.

The period of buying and holding a coin is a taxable event that can affect your tax rates. Your income and the length of time you hold the cryptocurrency are the two factors that crypto-asset gains are calculated in the United States. Gains from crypto assets can be both short term and long term, which in turn will determine the crypto tax rate.

As noted above, ETH has been held for less than a year, which means capital gains will be short-term and taxed at regular rates which currently cap at 37%. However, if ETH had been purchased in August 2019, then capital gains would be long-term capital gains rates that capped at 20%. Note that at the time of writing the article, decrees and / or legislation have been proposed that would increase or change the calculation of both ordinary income tax rates and the capital gains rate. long-term.

Taxable events related to DFTs

The most common activities related to DFTs, which are taxable events, include:

  • Purchase of TVN;
  • Exchange an NFT with another NFT;
  • Sell ​​an NFT for cryptocurrency.

Investors generating profits on NFTs through operational activities such as rents, loyalties, fees, etc. constitute another taxable event. Income generated by DFTs is subject to capital gains tax rates of up to 37%. Since NFTs are not converted to cash, investors may face tax consequences even without generating income from NFTs.

How are cryptocurrencies and NFTs taxed, and when?

To date, the IRS has not formally expressed how taxes should be treated for DTVs. Most likely, NFTs will likely have the same tax treatments as cryptocurrencies. The tax rate of an NFT will only determine how long investors hold their assets for short or long term capital gains. Short-term capital gains tax rates apply only to NFTs held for less than one year.

NST is also taxable depending on whether it is an ordinary capital gain or a recoverable capital gain. As clearly defined by the IRS, collectible NFTs are works of art, antiques, stamps, or other tangible property. Therefore, any NFT collectibles held for more than a year by an investor may result in high collection tax rates. Overall, more NFT transactions will amount to complicated tax rates.

For cryptocurrencies, they are taxed like stocks and bonds – which are treated as fixed assets in the eyes of the IRS. When it comes to cryptocurrency tax, investors only owe taxes if you spend or sell cryptocurrencies and have made a profit. On the other hand, if you haven’t made a profit by selling or spending your cryptocurrency, investors won’t owe anything during tax season.

Unexpected Tax Bill – What Now?

If you receive a crypto and NFT investment tax bill, there are a few things you can do. Above all, there is one thing that is not negotiable: ignoring the invoice. Make sure you face the taxes owed and make a plan. See below for some viable options:

Option 1: Sell coins to pay the tax bill

If you are an investor who has cryptocurrencies / NFTs for sale, this might be the obvious answer. However, what if you don’t have virtual currency to sell? If this is the case, the IRS typically allows investors to repay their taxes over a period of six months. To do this, you will need to complete the paperwork provided by your local tax office.

Option 2: Sign up for a payment plan with the IRS

This option only applies if the tax payable is less than $ 50,000. The investor and the IRS will agree on the amount to be paid monthly. To add, the IRS is allowed to approve or deny the payment plan. If the IRS approves, it means the investor has six years to make all future payments. However, it is not recommended to rely solely on this option as it is not guaranteed.

Option 3: Offer in compromise

Defined by the IRS, an offer in compromise allows you to settle your tax debt for less than the total amount you owe. To qualify for an Offer in Compromise, it is necessary to be based on the various factors:

  • Financial situation of the taxpayer
  • Amount of debt
  • The offer
  • Debt occurrence

An offer in compromise is the most difficult to obtain of the options available. You can’t just call the IRS and ask for a deal. This option involves filling out IRS forms, providing financial information, and offering an offer amount.

Option 4: Consult a tax expert and / or a tax lawyer

Overall, investors should meet with a tax advisor (CPA or Lawyer) so that a professional can provide the best advice for your individual tax situation. Keep in mind that there are solutions.

Christopher Rogers, Esq. is a senior tax partner at Capital Fund Law Group, where he advises clients in the areas of investment fund formation, securities law, corporate law and taxation. Mr. Rogers also provides advice on the structuring, establishment and compliance of hedge funds, private equity funds, real estate funds and other alternative investment vehicles, such as digital assets. For more information about Mr. Rogers and Capital Fund Law Group, please visit their website at: https://www.capitalfundlaw.com/

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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