Welcome!

Welcome to our Digital Communiqué where we feature a number of pertinent articles, such as real estate news, and local events and information.

As we present to you our end-of-year edition of our newsletter for 2005, we want to wish you a Happy and Safe Holiday Season and hope that as we bring this year to a close, that your next year will be full of prosperity and happiness.

We hope you find this issue helpful and informative. You can always explore past issues by visiting the newsletter archive. If you would like to be notified of new communiqués monthly, just send your email address to newsletter@carlabontenrealty.com. Don't forget to include your email address! Enjoy!

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Carla Bonten Realty, Inc. News:

HURRICANE AFTERMATH -2005

Although some shrug non-chalantly at the thought of a hurricane, there is no doubt that mentioning the word to most brings at minimum, a back-of-the-neck, hair-raising, eerie and sometimes frightening feeling.  It could be because of some bad experiences they’ve encountered first hand or know someone close to them who have had such experiences.

None-the-less, it is part of a lifestyle that encompasses our beautiful paradise.  California has its earthquakes, Hawaii its volcanoes, Colorado with its bitter-cold blizzards, Southwest Florida and the rest of the Gulf Coast regions have their Hurricanes.  No matter which way you look at it, every paradise has its dues that we must pay to enjoy. 
Unfortunately, as you already know with the Wraths of Katrina, Rita, and Wilma this year, payment was much too high…done so with the claimed lives of loved ones.  It is during these massive disasters though that we see the true nature of our brethren.  They reach out to help those in need regardless of race, color, creed, nationality, sex, age, and so-on and so-forth.  Even National Borders were “forgotten” as other countries like Mexico and Canada came to the aid of those in Louisiana and Mississippi. All have worked long and hard to help bring forth some form of relief to those who were in dire need.

We at Carla Bonten Realty, Inc are very fortunate to have people who reach out to those communities in need within our company…people like Peter Meili, one of our realtors, who took a sabbatical from work to go help re-build homes in Mississippi for those who lost everything.  We have had the opportunity to take much needed supplies for the little people (children and babies) in Clewiston after Wilma recently blew her way across Florida.  And we’re not the only ones.  Many people and companies have helped and are helping with the recovery efforts either in their own communities or by reaching out to communities outside their own.

We have been very blessed and very lucky to have survived this hurricane season virtually un-scathed.  We welcome the opportunity to, and I’m sure we speak for all the different genres of businesses in our area, to bring you a pleasant and fruitful visit either “for a vacation or a lifetime” here in Bonita Springs, Estero, Ft. Myers Beach, Ft. Myers, and Naples. 

Don’t be hesitant, don’t be afraid.  Our paradise welcomes you with warm, open arms. We’re all here at your service. 

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CONGRATULATONS, 2005 TOP PRODUCERS!!
September - October 2005
Top Producers

Pamela McCall
Peter Meili
Steve Leek
The Meeks Team

Pamela McCall, Realtor®
September Listing Agent
Pamela McCall has been in residential and commercial real estate since 1979. After traveling the world with the Department of State/Foreign Service, Pam and her husband Chris returned to the Bonita Springs/Naples area where she has continued her real estate career. She is very active in the city of Bonita Springs and her fluency in Spanish, German, and Portuguese coupled with her specialization in 1031 exchanges makes her, "your favorite realtor in the world," a strong force here at Carla Bonten Realty, Inc.

You can email Pamela at: pamela@carlabontenrealty.com

Peter Meili, Realtor®
September Selling Agent
Peter Meili was born and raised in Zurich, Switzerland. He was educated in Switzerland, Germany and the US. Among others, he attended the world-renowned hotel school, Ecole Hoteliere in Lausanne, Switzerland. The hotel business took him around the world, specializing in opening new hotel properties. That is what originally brought him and his lovely family to Naples, Florida, known as "America's Best Kept Secret".
He brings this professionalism to his eight year real estate career working with rentals, new home construction and general real estate. His fluency in Swiss German, English, German, French, Spanish and some Portuguese allows him to also dedicate his experience to the international clientele in the area. You will receive the "Royal Treatment"!
Peter is a member of the National Association of Realtors, the Florida Association of Realtors, the Bonita Springs Board of Realtors and the Christian Chamber of Commerce.
Email Peter at: pmeili@carlabontenrealty.com

Steve Leek, Realtor®
October Listing Agent
Steve Leek comes to Carla Bonten Realty with an extensive background in corporate finance and residential/commercial real estate. His career has spanned over 20 years in commercial and mortgage bank management. He has been a licensed real estate professional for over 15 years and currently holds active broker’s licenses in multiple states.
While assisting home buyers and investors with their individual needs, Steve has personally owned and managed well over 200 residential, vacation, agricultural and investment properties. Steve and his wife Nancy have owned their beach home on scenic Hickory Island in South Lee County since 1998. This blend of background and expertise brings a combination of skills unique to Carla Bonten Realty and Southwest Florida.

Contact information:
Email – sleek@carlabontenrealty.com

The Meeks Team
Cary Meeks, Realtor®
Gerry Meeks, Realtor®
October Sales Agents

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Real Estate Tax Law

Demian Kruchten on Florida Homestead Exemption

Often times when our firm handles a closing the question of Florida homestead exemption comes up from those buying their first home in our state or sometimes from buyers from other countries. The County Property Appraisers office has pamphlets explaining the process in detail. For a quick reference, I have listed the basics of exemption below:

• Every person who owns a dwelling in the State of Florida and who resides in that dwelling as their permanent home is eligible for this exemption.
• To qualify the owner must be a permanent resident of Florida as of January 1st the year you apply for the exemption.
• Florida Statutes allow only one Homestead Exemption per "family unit." This means that anyone applying for the Homestead Exemption in Collier County would not be legally entitled to receive the exemption if they or their spouse are receiving residency-based exemption(s) in another state. This includes veterans and senior citizen exemptions.
• The person applying must have:
• Evidence of ownership, deed, contract, etc.
• Social Security Numbers for all owners
• Voter Registration (if you vote) or a Declaration of Domicile filed with the Clerk of the Circuit Court prior to January 1 of the year of application
• Florida Driver License
• Florida vehicle registration

Additional information:

• If not a U.S. citizen, a resident alien "green" card.
• If your property is held in trust, a complete copy of the trust agreement.
• If your residence is a mobile home, the real property decal number and a copy of the registration or title to the mobile home.

And then there is the question of Loss of Homestead Exemption…
The rental of an entire dwelling previously claimed to be a homestead for tax purposes shall constitute abandonment of said dwelling as a homestead. Abandonment of such homestead after January 1st of any year shall not affect the homestead exemption for tax purposes for that particular year.

As in any legal transaction, know your rights, your limitations and your requirements.  A little homework and knowledge can be very helpful and save you money.

Demian Kruchten on
Florida Homestead Exemption
Kruchten Law Firm
975 6th Ave. South
Naples, FL 34102
239-775-8962
dmk@klflaw.com

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Ask Carla!

My sales team and I are frequently asked questions about real estate transactions. We have decided that including a few commonly asked questions in our newsletter would be helpful to our clients.

Dear Carla,
My sister says she’s made a bundle because of rising real estate values by acquiring and selling investment properties. I say she is she’s delusional because every time she sells a property she must pay capital gains tax. She claims that she has a way to avoid this time and again. She mentioned some kind of exchange. Carla, what is she talking about?
        --George from Ft. Myers Beach

Dear George,
Since 1921, the IRS has encouraged investment and business property owners to exchange their properties without owing any capital gain tax. This type of trade is considered by the IRS in Internal Revenue Code 1031 to be one continuous investment even though two or more properties are involved.

The rule permits a property owner to sell a qualified property and then buy a “like kind” replacement of equal or greater cost without incurring any obligation to pay a tax. The replacement does not have to be exactly the same kind of property. Your sister might sell an office building and buy vacant land or sell a rental house and buy an office building. The number of properties does not matter either. She could sell one property and buy three or vice versa. She may not, however, take cash out of the deal.

Aside form the annual depreciation tax deductions on many kinds of properties, rentals in particular, and the deferment of capital gains, there are several other reasons that IRS 1031 exchanges are useful. An owner could:

1. Receive tax free cash from the refinancing before or after, but not as part of, the exchange.
2. Divest difficult to sell property by trading for something easier to sell.
3. Increase the depreciable basis by buying a larger building to depreciate.
4. Buy a property that is easier to manage than the one currently owned.

After the sale of the investment property the exchanger has 45 days to designate the qualifying replacement that will be purchased with the proceeds of the sale. The investor may actually choose three in anticipation that something may deter the sale. The investor has 180 days to complete the acquisition.

It is also possible to acquire qualifying replacement property before the old property is sold. This rule, Revenue Procedure 2000-37, minimizes the drawback of having to act in 45 days through a “reverse exchange.” Title to the property acquired in the “reverse exchange” must be in the name of a third-party intermediary until the old property in the exchange is sold.

Sounds like your sister is a wise investor.


Dear Carla,
My husband and I would like to benefit from the skyrocketing appreciation of Florida properties by purchasing vacant residential lots in high growth areas. Should we form a Limited Liability Company to do this, as my husband suggested? What exactly is this? If we buy a second property, should we form another LLC?
          --Elizabeth from Naples

Dear Elizabeth,
A Limited Liability Company is created by filing a document similar to articles of incorporation with the Florida Secretary of State. The designation of Limited Liability Company, usually abbreviated LLC, must be part of the name.

The LLC is a legal entity, separate and apart from the individual investors. However, the company is not governed by corporate by-laws but by an Operating Agreement, closer in form to a partnership agreement. This agreement sets the rules for governing the company (such as the rules for meetings, if any) as well as the rights and responsibilities of the members. It states the members' understanding of who is responsible for contributions to capital and how much, who is to receive distributions and how much, who is to be allocated the various tax attributes of the company such as profits, losses, gains and credits, and under what circumstance the company will dissolve, among others. The Operating Agreement is not filed with any state agency.

Real estate investors known that the reason to form an LLC and to transfer investment real estate to the LLC is to reduce or eliminate the risk that the investor may lose his or her life savings because of a disaster with the property. Under the typical LLC statute, the members are all shielded from the company's debts unless they affirmatively undertake responsibility for such debt, such as by a guarantee to a lender. Also, the Internal Revenue Service permits all LLCs to be taxed as partnerships, eliminating double taxation at the federal level. An additional advantage of an LLC is that the members need not be US citizens.

Whether to form a new LLC for each new property is dependent upon your tolerance for risk. Some risk adverse investors believe every investment property should be owned by a separate Limited Liability Company that owns only one property and that is not engaged in any other business. If one property becomes exposed to legal action, the others are not at risk. Others, particularly investors in vacant land, say that the likelihood of legal exposure on a vacant lot is low and not worth the cost of forming separate LLCs.

Forming an LLC in Florida is accomplished by submitting properly formatted Florida Articles of Organization and other paperwork and fees to the Florida Secretary of State. www.sunbiz.org

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Real Estate Tax Law

Advantages of the new Individual Retirement Account (IRA) tax laws….
by Nancy K. Reynolds, CPA*,
Naples, Florida

Now you can invest in Real Estate as long as it is not for personal use (present or future).  This can be a great way to invest when you are more comfortable investing in real property as opposed to investing in the traditional way, the stock market.  When you sell the real estate investment, leaving it in your IRA until the sale date, then the gain will be tax deferred until it is withdrawn by you.

The negative could be that, if you are going to withdraw the gain from your IRA in the next few years, the deferred taxes may not compensate for switching from long-term capital gain tax (property held for over a year), to ordinary income tax that may be at a higher rate.

Because of administrative burdens, some IRA trustees restrict the type of investments you can have in your IRA.  If you are not your own trustee, ask your trustee if real estate investment is an option.  The IRA law does not prohibit investing in real estate, but trustees are not required to offer this type of investment.

The restrictions of the IRA law do not permit investments in collectibles such as:  artwork, stamps, rugs, antiques and life insurance contracts.  Other prohibited transactions are borrowing money from the IRA, selling property to it, receiving unreasonable compensation for managing it and using it as a security for a loan.

The SEPs and Simple IRA plans have the same investment restrictions as the traditional IRA

For more information:
Reynolds & Associates CPAs, P.A.
8955 Fontana Del Sol Way, Naples, Florida 34109
Telephone 239-593-6006
or email nreynolds@cpanaples.com

*CPA designation is regulated by the State of Florida

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Visit InvesterWords.com for the most comprehensive financial glossary on the web.

Visit the Yahoo Tax Center for financial and tax information as well as a glossary.

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What's new

Carla Bonten Realty and Rentals opened a new beach location on Hickory Blvd. Bonita Springs, This is a unique location to serve our customers. We are located next to the Big Hickory Seafood Grill. Our sales and Rental Team specialist are welcoming you!

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Area Real Estate News

AREA ACTIVITIES & EVENTS:

The following events were taken from the Naples Daily News:

THEATRE

"My Three Angels," a holiday story about three convicts and a family, 8 p.m. Tuesdays-Saturdays, 2 p.m. Wednesdays and Sundays, from Nov. 25-Dec. 18, Florida Repertory Theatre, Arcade Theatre, 2267 First St., Fort Myers. $15, $30 and $34, adults; half price, students. (239) 332-4488.

— "Escanaba in Da Moonlight," join the Soady family reunion and return to Escanaba, 8 p.m. Nov. 25, 26, Dec. 1, 2, 3, 8, 9 and 10, Norris Center, 755 Eight Ave. S. $15, adults; $10, students. 213-3058.

"Morning's at Seven," a bittersweet comedy of the love and rivalry in an extended family of four sisters and their husbands by Paul Osborn, performed by the Naples Players, 8 p.m. Wednesdays-Saturdays and 2 p.m. Sundays, Nov. 23-Dec. 17, and 8 p.m. Nov. 27, Blackburn Hall, Sugden Community Theatre, 701 Fifth Ave. S., Naples. (No show on Thanksgiving, Nov. 24) $30, adults; $10, students. 263-7990.

—"It's Your Funeral," a farce about an author who fakes his own death, 8 p.m. Thursdays-Saturdays and 2 p.m. Sundays, Dec. 1-17, Theatre Conspiracy, 10091 McGregor Blvd., Fort Myers. $16, adults; $7 students. (239) 936-3239.

— Staged readings of the four plays by the finalists in the 2005 new play competition by Naples Players' Etc., 7:30 p.m. Dec. 2, Sugden Community Theatre, Tobye Studio, 701 Fifth Ave. S. Awards and reception to follow. $8. 263-7990.

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Need an idea of what dining experiences are in our area? Click here for a list of some of the best! You can also visit www.bonitamenus.com for select restaurant menus online!

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