CREJ - Journal

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March 18-March 31, 2015 — COLORADO REAL ESTATE JOURNAL — Page 13AA
For contact information, association profiles, and links,
please visi nd click on Industry Directory.
American Council of Engineering
Companies/Colorado
American Institute of Architects Colorado
American Society of Interior Designers
American Society of Landscape Architects,
Colorado Chapter
American Subcontractors Association
Apartment Association of Metro Denver
Appraisal Institute
Associated Builders & Contractors
Associated General Contractors
Building Operators Association of Colorado
Building Owners & Managers Association, Denver
Building Owners & Managers Association, Pikes Peak
CCIM – Certified Commercial Investment Members,
Colorado/Wyoming Chapter
Colorado Bar Association
Colorado Hotel & Lodging Association
Commercial Brokers of Boulder
Commercial Real Estate Women - CREW
Community Associations Institute
CoreNet Colorado
Counselors of Real Estate
Denver Metro Commercial Association
of Realtors - DMCAR
Institute of Real Estate Management, Denver Chapter
Institute of Real Estate Management, Southern
Colorado Chapter
International Council of Shopping Centers, Rocky
Mountain Chapter
International Facilities Management Association,
Denver Chapter
International Facilities Management Association,
Pikes Peak Chapter
Investment Community of the Rockies
LeadingAge Colorado
Mile High Exchangors
NAIOP Colorado – The Commercial Real Estate
Development Association
Professional Land Surveyors of Colorado
Rocky Mountain Masonry Institute
Rocky Mountain Shopping Center Association
Society for Marketing Professional Services
Society of Industrial & Office Realtors
Southern Colorado Commercial Brokers
Urban Land Institute
U.S. Green Building Council, Colorado Chapter
WiD – Women in Design
If your association would like to be included in this directory,
please contact Lori Golightly at 303-623-1148
Associations
DirectoryDirectory
Professional Services
n CMLA – ColoradoMortgage
Lenders Association will host
its 24th annual Rocky Mountain
Mortgage Lenders Expo April 9.
The expo will be held at the Mar-
riott Denver Tech Center, 4900 S.
Syracuse St., Denver.
The event will feature educa-
tional programming, network-
ing events and an expo hall with
wholesale and correspondent
lenders, marketing and adver-
tising firms, technology provid-
ers and support services, for
example. The expo is expected to
attract more than 1,000 industry
professionals.
Reggie Rivers, a former NFL
running backwho played six sea-
sons with the Denver Broncos,
will be the keynote speaker.
For more information, visit
.
n CREJ – Colorado Real Estate
Journal will present the 2015
Hotel & Resort Summit & Expo
at the Inverness Hotel and Con-
ference Center at 200 Inverness
Drive West in Englewood.
The April 14 event, from 7:15
a.m. to noon, will be Denver’s
largest gathering of hotel own-
ers, developers, property manag-
ers, brokers, lenders and other
related real estate professionals.
Panels include hotel develop-
ment and investment strategies,
the current state of the national
and regional lodging industry, a
lender and capital markets panel
and a panel on architecture, engi-
neering and construction.
CREJ also will host the 2015
Health Care and Medical Office
Buildings Conference April 21.
For more information, visit
n CREW – Commercial Real
Estate Women Denver will host
Revitalization of Retail, a panel
discussion about how Denver’s
surging economy is transforming
the city’s retail landscape.
The April 21 event will fea-
ture four of the region’s top
retail developers and real estate
experts, who will discuss trends
in the sector and offer advice for
navigating the future of retail in
Colorado and the nation.
Speakers include Dorit Fisch-
er Makovsky, real estate broker
and manager of NAI Shames
Makovsky; Bill Johnson, co-
founder of WC Johnson LLC;
Anna Schmautz, director of
design and construction of Quiz-
nos; and Sean Sjodin, director of
acquisitions Nex-Gen Properties.
The event will be held from
11:30 a.m. to 1 p.m. at The Curtis,
1405 Curtis St. in Denver.
For more information, visit
.
n ULI Colorado will host its
second annual Impact Awards
April 30 at the Seawell Grand
Ballroom, 1350 Arapahoe St.,
Denver.
The Impact Awards program
is modeled after the ULI Awards
for Excellence and recognizes
only those projects that realize
ULI best practices while provid-
ing successful design and eco-
nomic models.
The program will showcase
and highlight the best develop-
ment projects in Colorado. Bever-
ly Carlson of First American Title
Insurance Co. and Stacy Stout
of StoutStrategies are co-chairing
the event.
For more information, visit
n USGBC Colorado – U.S.
Green Building Council Colora-
do Chapter will host the Rocky
Mountain Green 2015 Confer-
ence April 2-3.
The two-day conference, held
at the Hyatt Regency Denver at
the Colorado Convention Center,
will explore green building issues
from net zero energy to tactical
urbanism and beyond. Attendees
can earn GBCI/Real Estate/AIA
continuing education hours.
This year, a commercial real
estate track, which will showcase
the latest strategies in green build-
ing for brokers, property man-
agers and developers, has been
added.
For more information, visit
. s
P resident Barack Obama’s
proposed budget was
released Feb. 2. The
administration’s budget contains a
number of tax increases and signif-
icant limitations to Section 1031 tax
deferred exchanges, projected to
raise $320 billion in new revenue.
The president’s proposals
would, if enacted, have a signifi-
cant impact on real estate investors.
n Increase in capital gain tax
rate. The president has proposed
increasing the top capital gain tax
rate from 20 percent to 28 percent.
Undercurrent law,manyreal estate
investors in the top tax bracket face
an additional 3.8 percent tax on
net investment income under IRC
Section 1411, resulting in a total
tax rate of 23.8 percent. Under the
proposal, this would increase to
31.8 percent.
n Elimination of stepped-up
basis at death. Under current tax
law, when a taxpayer dies, the tax-
payer’s heirs receive a step up in
the basis of inherited property. The
basis is stepped up to the fair mar-
ket value of the asset on the date of
death. The president has proposed
eliminating this stepped-up basis,
whichwill result in thebuilt-ingain
remaining in the property after it
passes to the heirs. Although the
proposal has some small exclu-
sions ($200,000 on general asset
gains and $500,000 for a taxpayer’s
primary residence), eliminating the
stepped-up basis would seriously
impact the heirs of investors who
die with appreciated assets.
n Limiting tax deferral on real
property exchanges to $1million
per taxpayer annually.
The good news is investors
still have the opportunity to take
advantage of the current tax code
and achieve tax-deferral benefits
today.
IRC Section 1031 tax-deferred
exchanges have been a part of the
tax code since
1921. Section
1031 allows an
investor who
holds property
for investment
purposes, or
for use in a
trade or busi-
ness, to defer
all four levels
of potential
capital gain
taxes (federal
capital gain,
federal depre-
ciation recapture, net investment
income and state capital gain) by
exchanging for qualifying like-
kind property under Section 1031.
By deferring the capital gain tax,
an investor has significantly more
purchasing power and better over-
all investment returns.
Let’s compare the tax treatment
for the sale of an investment prop-
erty between: (i) paying all the
taxes owed, or (ii) using a 1031
exchange to defer 100 percent of
the taxes owed. We will assume
the property has total capital gain
of $1.3 million, $300,000 of which
is from depreciation recapture and
$1 million of which is from asset
appreciation. For this example,
we will assume this is a Colorado
investor who has a 4.63 percent
state tax rate, and we will assume
the investor is also paying the 3.8
percent net investment income tax
on the entire capital gain.
Assume the investor in theprevi-
ous example sold the relinquished
property for a total net sales price
of $2million, with, as stated above,
$1.3 million
of total capital
gain. Assume
the inves-
tor intends
to apply the
sales proceeds
toward a 25
percent down
payment on a
replacement
property, with
conventional
financing for
the remaining
75 percent of
the replacement propertypurchase
price. We will compare howmuch
property the investorwho sells and
pays all the taxes can purchase ver-
sus howmuch property the inves-
tor who exchanges and defers 100
percent of the capital gains tax can
purchase.
Sell in 2015 and pay taxes:
($2,000,000 - $384,590) = $1,615,410
x 4 = $6,461,640
Exchange in 2015 and defer
taxes: ($2,000,000 - $0) = $2,000,000
x 4 = $8,000,000
By taking advantage of a 1031
exchange, the investor defers all
taxes, thus preserving his net sales
proceeds for the purchase of better
performing replacement property.
In this comparison, the investor
who exchanges versus sells is able
to purchase a replacement prop-
ertyworth considerablymore.
This information is not intend-
ed to replace qualified legal and/
or tax advisers. Every taxpayer
should review his specific transac-
tion with his own legal and/or tax
counsel.s
Erin Crowley
Colorado division
manager, Asset
Preservation Inc.,
Denver
Scott Saunders
Vice president, Asset
Preservation Inc.,
Colorado Springs