What Are First Position Commercial Mortgage Notes?

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Barry Kornfeld
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Barry M. Kornfeld is an experienced financial advisor based in Boca Raton, Florida. As a principal of First Financial Tax Group, Barry Kornfeld advises clients on alternative income and wealth management opportunities, including first position commercial mortgage (FPCM) notes.

For individuals planning for, or who are already in, retirement, first position commercial mortgage notes present an attractive alternative income source. First position commercial mortgage notes allow clients (of a given financial institution) to act as lenders of private third party loans. Secured by high value commercial real estate properties such as multifamily residential buildings, office buildings, and retail centers, these bridge loans yield monthly interest payments for a relatively short duration. At a minimum, they provide returns of six percent for one year, paid out monthly.

FPCM notes are a lower-risk option for individuals seeking alternative monthly income. As indicated by their name, first position commercial mortgage notes allow lenders to hold the first lien on a commercial property. This ensures that they hold priority over all other lien holders, giving them greater security.

First position commercial mortgage notes typically require a low minimum initial commitment of just $25,000 and may be strategically incorporated into a diverse array of financial portfolios. To take advantage of this opportunity, lenders may use funds from a variety of accounts, including trusts, joint accounts, or IRAs.

Tax Exemption Thresholds Remain Largely Unchanged in 2017

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First Financial Tax Group
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Barry M. Kornfeld is the principal of First Financial Tax Group, a Florida tax and insurance services provider. As an experienced financial advisor, Barry Kornfeld strives to keep his clients up-to-date on the regulatory developments that could impact their financial strategies.

Every year, the United States Internal Revenue Service adjusts the thresholds and limitations for retirement plan contributions, tax credits and deductions, and personal exemptions. In 2017, many regulatory requirements affecting retirement planning remained unchanged from 2016. The majority of employees enrolled in 401(k), 403(b), and most 457 plans may still defer a maximum of $18,000 to their retirement accounts, while employees over 50 years old retain the right to defer an additional $1,000. Similarly, the annual IRA contribution limits of $5,500 for individuals under age 50 and $6,000 for those over 50 years old have not changed.

The IRS did make one noteworthy change to its estate and gift tax regulations. While the annual limit for gift tax exclusion holds steady at $14,000, the threshold for gift and estate tax exclusion has risen from $5.45 million in 2016 to $5.49 million in 2017.

New Law Means Early Filers Could See Delays in Tax Returns

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Barry Kornfeld
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Respected Florida financial advisor Barry M. Kornfeld leads First Financial Tax Group in Boca Raton, where he offers clients a full range of retirement advice and income planning services. As part of his ongoing work, Barry M. Kornfeld stays up to date on changing tax laws.

New changes to the way the Internal Revenue Service (IRS) processes refunds could impact early filers in 2017. Many people who file their taxes early depend on the refunds to pay off debt from Christmas, take care of lingering bills, or fill other financial gaps. However, legislation passed in 2015 that went into effect this year will see the IRS hold early returns until mid-February as a preventive measure against fraud.

The IRS will specifically hold returns for individuals and families who claimed either the Earned Income Tax Credit or the Additional Child Tax Credit. While most filers this tax season will see their refunds returned to them in approximately 21 days, the new law requires that absolutely no refunds will be released until February 15 to filers who claimed either of these credits.

These sorts of laws are among the many steps the IRS is implementing to reduce the amount of tax return fraud and ensure citizens receive the refunds to which they are entitled.

Most Americans Haven’t Researched or Saved for Retirement

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Based in Boca Raton, Florida, financial advisor Barry M. Kornfeld serves as the principal of First Financial Tax Group, which offers a wide array of growth, income, and tax services and strategies. In his work, Barry M. Kornfeld helps individuals assess their retirement income needs and find the right solutions to achieve those goals.

Recent surveys indicate that Americans are inadequately prepared for retirement, both in research and actual savings. A recent poll conducted by the Transamerica Center for Retirement Studies shows that only 10 percent of Americans have taken the time to estimate the income they will need for retirement.

Additionally, that survey shows that most people expect Social Security to be their only means of income in retirement years. Most Americans also plan to work past retirement age in order to save extra retirement funds, but don’t really have an established plan for how much they will save or how to go about it.

Another survey conducted by GoBankingRates shows that one in three Americans have absolutely no money set aside for retirement at all, and an additional 23 percent report having only $10,000 set aside.

What all this data suggests is that Americans as a whole are woefully underprepared for their financial needs in retirement. This only serves to increase the importance of seeking advice from an experienced, capable retirement planning professional.