CONSIDER SELLER FINANCING
USE COST SEGREGATION
TIME YOUR TRANSACTIONS
Sometimes, changing the timing of a transaction by even just one day can have a very significant tax impact overall. For example, if you were set to sell your rental property in December of this year but were able to delay the actual closing until January of next year, not only does this help you to delay the associated taxes for an entire year, but it also provides you with another year to plan for ways to offset that tax liability.
Due to market conditions, seller financing is now back in play for many multifamily transactions. Here are the tips that I always give my clients when contemplating seller financing: 1. Always ask if the seller is willing to get creative before you make a written offer. 2. Never sign a personal guarantee for seller financing. 3. Always make the term of the seller financing co-terminus with the first loan.
Before the year is over, make sure you know where you stand tax wise. If you are going to have capital gains or have income but can take advantage of Real Estate Professional (REP) status, be sure to invest in a property that has the benefits of a cost segregation study. It’s a great way to frontload depreciation, cut your tax bill and a great tool to compound wealth. This is a tool I use to minimize my taxes. Don’t wait until the last minute and jump into a deal that you haven’t done your due diligence on just for the sake of tax savings.
DELAY THE ASSOCIATED TAXES FOR AN ENTIRE YEAR.
SELLER FINANCING IS NOW BACK IN PLAY.
THIS IS A TOOL I USE TO MINIMIZE MY TAXES.
Amanda Han, CPA Keystone CPA Author of The Book on Tax Strategies for the Savvy Real Estate Investor Read Amanda’s Book
Charles Dobens Investor, Founder, and Coach Multifamily Investing Academy Connect with Charles
Gary Lipsky President Break of Day Capital Host of the Real Estate Investor Podcast Connect with Gary
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