RENT Magazine Q4 '22

Some of the alternate solutions in the marketplace utilize IRC 453 and IRC 643 as well as other tax codes. Here are some to name a few:

Defer taxes for 30 years and utilize the funds for business or call a financial advisor to put the funds into a financial vehicle of choice. TAX DEFERRED CASH OUT

Three of this options can also rescue a failing exchange. This is a great way to still receive tax deferral if an investor is one of those whose exchange falls into the 40-60% of failed exchanges. Those are the tax deferred cash-out, structured installment sale, and deferred sales trust. All this hinges on having a Qualified 1031 Exchange Intermediary, also known as an accommodator, that cooperates with Tax Code 453 options for rescuing a failing (not failed) exchange.

COMPLEX SPENDTHRIFT TRUST

Defer taxes for generations and use the funds to pay for all assets in the trust (pre-tax) such as a primary residence, cars, boats, etc.

STRUCTURED INSTALLMENT SALE

Spreads out the capital gains taxes with the goal to be in lower tax brackets. One can utilize an annuity that can spread out the taxes for 5-40 years.

CHARITABLE TRUST

Eliminates capital gains taxes and provides a charitable deduction.

DEFERRED SALES TRUST

Another means to spread out the capital gains taxes over a period of time that one sets up the contract for.

Just remember, if someone feels like they are stuck in the 1031 exchange system, they could use a dose of hope that there are more flexible solutions that may be of great benefit to them. They also need a capital gains tax strategist that will take the time to look at the numbers, assess their true goals, and consider their personality to see if there are options that make a lot more sense than the system that they have known for years, and maybe decades. There are options! Conclusion

To get a free tax deferment consultation to find the strategy that works best for you, click here.

SCOTT VARNEY Capital Gains Tax Strategist Financial Tax Strategies (408) 569-0778.

Scott Varney is a capital gains tax strategist as well as a financial services professional. He helps clients think through options to defer, reduce, or eliminate capital gains taxes upon the selling of a highly appreciated asset, in this case, apartment buildings. He has a background in real estate as a top 1% producer nationally in the realm of residential real estate. He enjoys being with people and loves the opportunity to help solve challenging issues.

PAGE 27

Powered by