The upper part of the property zoned R-1 residential the lower part is zoned W-1 for hotel, condominium, timeshare, villas and or subdivision. Currently operating as a beach bar and restaurant. Three stunning white sand beaches located on the southside of St. Thomas close to Antilles School and Frenchman's Reef. Also includes parcel 21-74, 22, 21-60 and parcel 23 Frenchman's Bay.Also includes a very old great house and above ground cistern and guest and employee quarters in fair condition in a dynamite location with stunning views.
Area: St. Thomas
Plot/Unit Number: 21-73
Estate: Frenchman Bay FB
Quarter: Frenchmans Bay
Geo Lat: 18.323877
Geo Lon: -64.911195
Directions: Across from Antilles School take the next right going east after the entrance to the school and follow the road down to the beach. Note sign ABI BAR.
Postal Code: 00802
General Property Description
Current Price: 23000000
List Price: 23000000
Lot Acres: 130
Realtor.COM Type: Land
Sub Type: Undeveloped (20AC & Over)
Tax Year: 2018
Association Fee: no
Water Front: Yes
Stamp Tax: Paid by Seller
Active HOA: No
Waterfront: Sandy Beach
View: Panoramic; Sea; South Shore
Amenities: Beach Club; Restaurant; Ruins; Well
Topography: Beach Front; Water Front
What is a 1031 Exchange?
Simply stated, it is a way for owners of investment real estate to buy and sell property and defer payment of any capital gains taxes by reinvesting their money in other "like kind" property. These transactions are known as deferred exchanges or 1031 Exchanges. "Like kind" is a bit of a misnomer in that it can really be any type of real estate held for business or investment purposes; so, for example, an apartment building could be exchanged for vacation villa or a beachfront lot. The key is that these code provisions relate to the sale and purchase of properties held primarily for business or investment.
Section 1.1031 of the IRS Code lays out in detail the procedure for turning a sale and purchase transaction into a qualified 1031 exchange thereby deferring your capital gains tax obligations. The good news is that the provisions of this IRS code apply to the U. S. Virgin Islands.
Essential Elements of a 1031 Exchange
One of the rules is that you are not allowed to receive or touch any of the money from the sale of your relinquished property. Instead, the rules require that a "safe harbor" or Qualified Intermediary receive, hold and safeguard the proceeds of the sale until the exchange is completed. There are bonded companies that specialize in accommodating 1031 Exchanges.
The rules also require that certain time limits must be adhered to. You can identify up to three possible "replacement" properties in which to invest, but must do so within 45 days of the close of escrow on the first property. The ultimate acquisition of the replacement property must be completed within 180 days.
To defer all tax obligations, you must reinvest 100% of the sale proceeds (including any amounts used to pay off existing loans) into a "like kind" property or properties of equal or greater value than the property you sold.
The above outlines only the most basic elements of an exchange. While the rules in practice are quite simple to follow, you need expert advice to insure that you are following all of the rules and therefore benefiting from the 1031 tax savings provisions. Get the advice of your attorney or tax consultant in selecting a Qualified Intermediary. Their fees vary and their methods for holding the exchange proceeds differ. It is also important to know if the Qualified Intermediary will be investing the funds and in what type of investments
Qualified opportunity zones retain this designation for 10 years. Investors can defer tax on any prior gains until the end of 2026, so long as the gain is reinvested in a Qualified Opportunity Fund, an investment vehicle organized to make investments in Qualified Opportunity Zones. If the investor holds the investment in the fund for at least 10 years, the investor would be eligible for an increase in its basis equal to the fair market value of the investment on the date that it is sold. according to Treasury.
By statute, these tax break zones are limited to designated "low-income communities" in states and territories which meet certain criteria. Mapp nominated Christiansted and all of the western end of St. Croix, as well as most of the southern half of St. Thomas.
An earlier statement from Government House gave the following example of how these new tax breaks work:
Take a U.S. company that invested $10 million in a stock and sells that stock in 2018 for $20 million. Ordinarily, the $10 million gain would be subject to federal capital gains tax in 2018. If, however, within 180 days of selling the stock the company invests the $20 million in a tax break zone it obtains three significant benefits.
First, it defers payment of federal capital gains tax on the $10 million gain until the earlier of the date it sells its investment in the tax-break zone or Dec. 31, 2026.
Second, it receives a 10 percent reduction in federal capital gains tax if it holds the investment in the tax break zone for at least five years, and an additional five percent reduction if it holds the investment for at least seven years.
Third, it avoids federal capital gains tax altogether on any further appreciation in its investment in the tax break zone.
That is, if the company ultimately sells its investment in the tax break zone for $35 million after seven years â a gain of $25 million â it will defer capital gains tax on the original $10 million gain until the date of the sale, reduce the amount of that capital gain by 15 percent, and pay no capital gains tax at all on the $15 million appreciated gain.
There is a long history of Congress encouraging the territories to try to spur development with tax breaks. These new tax breaks join the 90 to 100 percent breaks on corporate income tax, gross receipts tax, property tax and excise tax the territory gives through the Economic Development Commission and through the University of the Virgin Islands Research and Technology Park.
In 2016, Mapp proposed a plan to boost the economy over five years, which relied heavily on hopes of massive growth in the number of entities taking advantage of the territory's tax break programs.
The U.S. Virgin Islands were among 18 states and territories approved in what the Treasury Department termed the "first round" of approved tax break zones. The others were: American Samoa; Arizona; California; Colorado; Georgia; Idaho; Kentucky; Michigan; Mississippi; Nebraska; New Jersey; Oklahoma; Puerto Rico; South Carolina; South Dakota; Vermont; and Wisconsin.