Legal Updates in Real Estate

Real Estate Professional Tax Status: Maximize Tax Benefits in Newport Beach & Orange County

May 22, 2025
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If you own rental property in Newport Beach, Costa Mesa, or coastal Orange County—or if you’re a high-income earner looking for strategic tax savings—qualifying as a Real Estate Professional under IRS rules could unlock major benefits. From deducting real estate losses against your W-2 income to avoiding the 3.8% Medicare tax on rental profits, REP status can significantly reduce your tax liability. But strict documentation and time-based tests apply, and California doesn’t follow the same rules. Learn what qualifies, what doesn’t, and how to stay compliant in this essential guide.

Can You 1031 Exchange Out of a Limited Partnership That Owns Real Estate? Not Directly — But There Are Workarounds

May 16, 2025
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Can you complete a 1031 exchange if you only own a limited partnership interest in real estate? Not directly—but strategic solutions like the “drop and swap” may provide a path forward. In this article, we explore the legal and tax complexities of navigating 1031 exchanges from within a partnership, with a focus on opportunities in high-value markets like Newport Beach.

waterfront homes with text overlay of "partition actions in California"

Partition Actions in California: What You Need to Know (and How to Avoid Them)

May 13, 2025
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When co-owners of real estate can’t agree on what to do with a property, a partition action may be the only option — but it’s rarely the best first step. In this article, we break down how partition actions work in California, explain recent changes under the Partition of Real Property Act, and share how Lucas Real Estate Group helps clients avoid costly litigation through strategic planning, buyouts, and trusted legal referrals.

nice pool home backyard with text overlay "governor extends protection from predatory real estate speculators in la fire impacted areas.

Ban on Predatory Real Estate Offers Related to LA Fires Extended Through July 1

May 9, 2025
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Ban on Predatory Real Estate Offers Extended
Governor Newsom has extended through July 1, 2025 the executive order prohibiting unsolicited, undervalued real estate offers to homeowners in firestorm-affected Los Angeles ZIP codes. This crucial protection targets predatory investor behavior aimed at vulnerable property owners still recovering from disaster.

While this new order applies to property sales, it’s important to note that rental price caps and eviction protections remain in effect under earlier executive actions.

📖 Read our full article to learn how these protections impact real estate professionals, landlords, and property owners throughout Southern California.

Image of a home in background with text, "California Homestead exemption"

California Homestead Exemption: Protecting Your Home Equity in Newport Beach and Coastal Orange County

May 6, 2025
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California’s homestead exemption—recently expanded and indexed for inflation—offers powerful legal protections for homeowners, especially in high-value areas like Newport Beach and Eastside Costa Mesa. In this article, the Lucas Real Estate Group breaks down the history of the homestead exemption, recent legal updates, and how to use it effectively as part of your real estate or estate planning strategy.

Prop 19 inflation adjustment info graphic with picture of house

Proposition 19 Update (2025): Intergenerational Transfer Cap Rises to $1,044,586

April 30, 2025
devinlucas

Proposition 19’s intergenerational transfer cap has been adjusted to $1,044,586 as of February 16, 2025, offering only modest relief for families hoping to preserve their property tax basis. For high-value areas like Newport Beach and Coastal Orange County, this minor inflation adjustment does little to mitigate the harsh tax implications of Prop 19. Learn what this means for your family and how Lucas Real Estate Group can help you plan strategically.

alarm clock and post it note infographic with "reminder" Attention California LLC Owners: Two Key Tax Reminders You Don’t Want to Miss

Attention California LLC Owners: Two Key Tax Reminders You Don’t Want to Miss – 1) Annual $800 Minimum Fee, and 2) Form 568 – Due April 15th

April 4, 2025
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If you own a California LLC — even one with no income or used solely to hold real estate — you’re still required to file Form 568 and pay the $800 minimum annual franchise tax. This blog breaks down the two most critical filing requirements for LLC owners, especially those using an LLC for privacy, rental properties, or estate planning purposes. Don’t risk penalties or suspension — find out what’s due, when, and how to stay compliant.

info graphic with photo of a home being swapped for another, with text "1031 exchanges: can you defer taxes on an empty home"

1031 Exchanges and Vacant Properties: Can You Defer Taxes on an Empty Home?

March 12, 2025
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Can a Vacant Property Qualify for a 1031 Exchange?
The IRS focuses on investment intent, not just rental income, to determine eligibility. Key factors include the original purpose of acquisition, tax treatment, marketing efforts, and whether the property was ever used personally. Court cases like Alderson v. Commissioner and Reesink v. Commissioner have ruled that properties held for appreciation—despite never being rented—can still qualify.
Read the full article for key legal precedents and expert guidance.

UPDATE: March 7 2025 Executive Order Further Extends Price Gouging Protections

March 9, 2025
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Governor Gavin Newsom’s Executive Order N-23-25, issued on March 7, 2025, extends rental price gouging protections in Los Angeles County until July 1, 2025. These protections cap rent increases at 10% and prohibit evictions aimed at re-listing properties at higher prices.

However, some properties are now exempt from HUD Fair Market Rent (FMR) calculations—specifically newly constructed units and high-value single-family homes (4+ bedrooms) in select Los Angeles ZIP codes. Importantly, these exemptions do NOT remove the 10% cap on rent increases and do NOT allow landlords to raise prices beyond prior rates if the property was rented or listed in the last year.

For landlords, property managers, and investors in Newport Beach, Costa Mesa, and beyond, these updates carry critical implications for leasing strategies, property valuations, and rental pricing. Orange County remains fully subject to price gouging laws, with no exemptions.

📖 Read our full article to understand how these changes impact your real estate business.

bag of money next to up arrow and a model house (inferring housing prices going up)

UPDATE: February 2025 Executive Order on Price Gouging Protections

February 9, 2025
devinlucas

On February 4, 2025, Governor Gavin Newsom issued Executive Order N-17-25, modifying California’s price gouging protections in response to the Los Angeles and Ventura County wildfires. This order expands price gouging restrictions to all rental housing, regardless of lease length, closing a loophole landlords previously used to avoid these rules. Additionally, it temporarily suspends price gouging restrictions for high-value, four-bedroom single-family homes in select high-rent ZIP codes until March 8, 2025. Notably, Orange County remains fully subject to HUD-based rental calculations where applicable. Understanding these updates is critical for landlords and property managers navigating rental pricing in Newport Beach, Costa Mesa, and beyond.

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