As more state and local governments weigh “shelter in place” orders in an effort to combat the spread of COVID-19, many businesses across the country are asking what constitutes an “essential” business and what to do if you don’t make the cut. The answers are not always clear or consistent, but there are steps you can take to be prepared.

In the event of a “shelter in place” order or a state’s COVID-19 mitigation initiative, the distinction between “essential” and “nonessential” is crucial in assessing what options are available to a business: whether it may maintain its business operations (adjusted for COVID-19 risks), or must reduce operations except for specified activities necessary to preserve the business and allow remote working (commonly referred to as “minimum basic operations”), or close for a period of time.

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In simplest terms, a 1031 exchange is a tax strategy that allows you to defer capital gains taxes when you sell a real estate property, by reinvesting the profits into another “like-kind” asset.

Capital gains tax is a levy assessed on the positive difference between the sale price of an asset and its original purchase price. The rates are 0-20% depending on your tax bracket.

For example, if you paid $100,000 for a property and you’re allowed to claim $5,000 in depreciation, you’ll be treated subsequently as if you’d paid $95,000 for the property. The $5,000 is then treated in a sale of the real estate as recapturing those depreciation deductions. The tax rate that applies to the recaptured amount is 25%. So if the person then sold the building for $110,000, there would be total capital gains of $15,000. Then, $5,000 of the sale figure would be treated as a recapture of the deduction from income. That recaptured amount is taxed at 25%. The remaining $10,000 of capital gain would be taxed at one of the 0%, 15%, or 20% rates.

2019 was a year where substantial headwinds negatively impacted economic growth and a series of international events threatened to bring what has become the longest economic expansion in history to an end. Yet despite these challenges, Gross Domestic Product continued to grow at more than 2.0% on an annual basis and stock market indices set record highs. For the majority of this expansion the growth rate has been subdued, but it is hard to complain about more than a decade of steady improvement.

While this current outbreak is the first time many of us have ever heard of the coronavirus, coronaviruses were first identified in the 1960s, and are a large family of viruses commonly found in different animal species, including cattle, cats, and bats. The present pandemic of “coronavirus disease 2019” (aka “COVID-19”), originated in Wuhan, Hubei Province, China, and is linked to a seafood and live animal market, suggesting an animal-to-person spread. In weeks following the initial infection, a growing number of people were diagnosed with the virus who were not exposed to animal markets, indicating a person-to-person spread.

Logan Freeman is a commercial real estate agent, developer, investor and capital raiser. He represents buyers and sellers of multifamily and commercial properties, sourcing cash flowing properties for investors through creativity, networking, hustle, and proven strategies. Logan specializes in off-market investment properties, and helps to place capital into the right projects.

Conclusions of Goldman Sachs Investor call where 1,500 companies dialed in. The key economic takeaways were:

50% of Americans will contract the virus (150m people) as it's very communicable. This is on a par with the common cold (Rhinovirus) of which there are about 200 strains and which the majority of Americans will get 2-4 per year.

70% of Germany will contract it (58M people). This is the next most relevant industrial economy to be effected.

Peak-virus is expected over the next eight weeks, declining thereafter.

I think responding emotionally to the short term panic in the market would be short-sighted and we have to encourage investors of the same. The real estate market has not and will not be substantially affected by the current correction except in that rates will likely drop and the volatility in the stock market will likely push capital into bonds and alternatives like real estate. Both of these will force real estate prices up, not down. Cash flowing real estate is the greatest hedge on the current stock market environment.