Buying Maine Land

Deferring Capital Gains When Selling Maine Land

Death and taxes are unavoidable but they can be delayed. The former by eating right and exercise and the later by employing the right strategy when selling your land.  If you are considering selling your land in Maine and will realize a large capital gain you may want to consider a 1031 tax deferred exchange, aka. Starker exchange.   Always consult with your tax advisor but be aware, not all CPA's have a comprehensive knowledge of the exchange process and the tax code involved.

One of the most common misconceptions is the term "like kind property".   If I sell my undeveloped land, I will need to replace it with another piece of undeveloped land, keeping with the "like kind".   NOT TRUE!!  The term "like kind" means "investment property" for "investment property".   If John Doe owns a 4 unit apartment building in Florida that has been used 100% as investment, Mr. Doe may exchange that property for a timber investment in Maine.

As with any topic, you will find tons of information on the internet regarding 1031 exchanges. One company that has been around for years is Asset Preservation.  Their web site can be found at http://apiexchange.com and you will find a lot of useful information.  Once on their site, click on the button "1031 Repeal Issue".  This will allow you to send an email to your Representative asking them not to repeal section 1031 of the IRC.

Even if you never have any intention of using a 1031 exchange, the buyer for your property may be involved in an exchange. This type of buyer is motivated and must meet a stringent time table to comply with IRC.

Comments

  1. No comments. Be the first to comment.

Permitting in Maine's Unorganized Territories

 

Building a cabin in the Unorganized Territories of Maine

Building a cabin in the Unorganized Territories of Maine

 

Buying a home or a piece of land can be a very enlightening experience. One of the more overlooked pieces of buying real estate is the fact that in most instances you will at some point need permits to complete renovations or build new structures.  Permitting is different depending on the location of the parcel and can be overwhelming to a new purchaser if they have no experience with the permitting process.  Permitting is mandated by Federal, State and/or local authorities.  Though the permitting process in most regions of the State of Maine is straight forward, permitting in the Unorganized Territories can be arduous if you are not familiar with the regulatory requirements.

Unorganized Territories in the State of Maine are overseen by the Land Use Planning Commission or LUPC. When you are ready to build, subdivide, mine, etc., you can go online to the LUPC website or call the representative in the jurisdiction where your parcel of land is located.  Generally, in either case you will receive a lengthy application with vague directions to complete along with a regulation manual, which are the regulations that must be followed when completing your chosen permitted activity.  Most individuals will struggle through the application process usually resulting in the submission of an incomplete application and much time wasted.  However, there are a few easy steps that can make this process less stressful.

First, find your parcel of land on the LUPC Parcel viewer located on the LUPC website. This viewer will give you the information you will need to follow the regulation manual, such as which LUPC Zone your property is located.  In most instances there will be more than one zone.

Land Use Planning Commission Parcel Viewer

Second, make sure you understand what can be done in each zone to ensure your project fits within the regulations. This can be accomplished by reviewing the sections of the regulations that apply to the zone where your property is located.

Third, acquire a copy of your deed. You will need to research the last 20 years of deed history and get copies of the deeds to submit with your LUPC application.  This can be accomplished by visiting your county registry.  Most of these files can be purchased online.

Last, you are now ready to complete your permit application. Fill out all questions.  Refer back to the regulations to ensure your project fits the zoning requirements.  The last page of the application contains a check-off sheet.  Review this sheet and check all that apply.  This will ensure you have a completed application on the first submittal.

Download LUPC Building Permit

Though it sounds easy, if you have questions don't hesitate to contact a LUPC Representative or an Environmental Consultant that can answer your questions. It is a lot less expensive to ask when in doubt than to try to complete something you don't understand or to receive the permit and have your interpretation being different than LUPC.