RENT Magazine Q4'23

GET A NEW DEPRECIATION SCHEDULE

RESOLVE CONFLICTING GOALS BETWEEN BUSINESS PARTNERS Say you have a partnership with 2 or more owners, and they want to sell. One or more of the partners want to sell and defer taxes. One or more of the partners want to take the money and run to Las Vegas. The bottom line is that a 1031 won’t work, but the Deferred Sales Trust will. The partners that want to defer taxes can do so and those that want to go to Vegas can do so, too. THE DEFERRED SALES TRUST CAN CREATE A MUCH GREATER DEPRECIATION BENEFIT. When buying a replacement property using a 1031, you do not get a new depreciation schedule on the replacement property. You may get a partial schedule, but not a new one. However, when selling and then buying with a Deferred Sales Trust, not only do you have no 1031 requirements on the new property, but you also get a new depreciation schedule. The Deferred Sales Trust can create a much greater depreciation benefit which in turn translates into more real estate wealth.

NO RUSH TO BUY A REPLACEMENT PROPERTY

Using a Deferred Sales Trust, you can make “real time” decisions. In a 1031, you have to make decisions upfront that may affect you in the following years. In a Deferred Sales Trust, you can make decisions at any point in the future. You can make investment decisions, such as buying more real estate, taking money out of the trust in the future and much more. With advanced planning, we can also save a failed 1031.

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