THE BEST PLAN IS TO MEET WITH A CAPITAL GAINS TAX STRATEGIST IN ADVANCE OF A SALE.
HERE ARE THE TAX STRATEGIES YOU CAN USE AND WHEN YOU CAN USE THEM:
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After Closing but within a 1031 Exchange's 45-day identification period (creating "mailbox money")
Before Closing
✓ 1031 Exchange ✓ Complex Spendthrift Trust ✓ Charitable Trust ✓ LLC with Charitable Intent ✓ Foundation ✓ Owner Carry (Traditional Installment Sale) ✓ Structured Installment Sale (sometimes with an annuity) ✓ Tax Deferred Cash Out
✓ Delaware Statutory Trust ✓ Tenant in Common
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Rescuing a failing (not failed) Exchange
✓ Tax Deferred Cash Out ✓ Deferred Sales Trust ✓ Structured Installment Sale
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After closing, but no 1031 Exchange involved
✓ Charitable Gift Annuity ✓ Qualified Opportunity Zones
And there are likely more options out there. The best plan is to meet with a capital gains tax strategist in advance of a sale. They can look at your case, evaluate the numbers, goals, and even your personality, to see which of the strategies make sense for the investor, if any. Sometimes, it's
better to take the gut punch, pay the taxes, and have absolute freedom to use the funds without long term commitments, restrictions, and costs that come with the strategies. Just know that the longer you wait, the more limited your tax deferral options become.
SCOTT VARNEY Capital Gains Tax Strategist S V Consultants, Inc (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.
Disclaimer : We do not give legal tax advice. The best way to get guidance on your specific legal issue is to contact an attorney.
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