You probably already know about the 1031 Exchange. (If not, take our course here.)
What most real estate investors don’t know is that…
15% of 1031 Exchanges Fail
If the 45 identification period is too short, there are multiple alternative solutions
You need a back-up strategy to ensure you do not pay taxes
We Have Options
Is The 45 Day Identification Period Too Short?
Sometimes real estate inventories are low, prices are high, or economic events are unfolding that send prices up or down, but you want to sell now. What can you do?
We are 1031 Exchange Accommodator reps. We have relationships with multiple 1031 Exchange companies. This not only allows us to pick the best exchange accommodator for your transaction type, it allows us to add language to your exchange that enables multiple tax minimization options during the exchange period and after your exchange closes.
The alternatives are too many to list, but here is one example:
Anita is selling her $10 million Investment property in CA. Her adjusted cost basis is $1,000,000 so she has a $9,000,000 capital gain. She wants to put her equity to work and buy two $5,000,000 properties in NV, but inventories are low and she is worried she might get stuck paying capital gains taxes.
After speaking with us, Anita chooses our vulture fund strategy which allows here to…
1. List her property without worrying if a replacement property would be available 2. Start a 1031 Exchange and discover what options are available 3. Allow the exchange to fail if nothing can be found and still not pay capital gains taxes
In Anita’s case, she sold her property, started a 1031 Exchange, and found one replacement property for $6,000,000, but she couldn’t find a second she wanted to buy. So, she took $3,000,000 in boot (taxable cash not used in a 1031 Exchange transaction) and moved it to a Deferred Sales Trustwhere the money was placed in a custodial account and invested tax deferred until she could find another property she liked two years later.
Anita then bought that new property two years later and still paid no capital gains taxes. This is one of eight different options Anita could chose from for this investment property sales scenario.
15% of 1031 Exchanges Fail. You need a back-up!
1031 Exchange transactions fail when one of two things happen…
1. The Exchangor (You) fails to identify a replacement property in 45 days.
2. The Exchangor (You) fails to buy the replacement property in 180 days.
These situations can happen for many reasons…
* Low Inventories
* Poor Planning
* The seller of a replacement property is unable to complete the transaction in time
* There are multiple offers on the property and you lose
* You cannot qualify for a loan
and many more…
This is why you need back-up options.
We Are Real Estate Investors Just Like You!
Carl and Chris have done twenty four 1031 Exchange Transactions between them.
Now we train real estate investors, business owners, realtors, and investment advisors how to reduce defer or completely eliminate capital gains taxes on the sale of a primary residence, second home, investment property, business, stocks, crypto, or just about any appreciated asset.
Below are a few of our most popular strategy categories.
Cash Out Strategies
If your strategy is to cash out, you need a way to protect yourself from paying 25% to 50% in capital gains taxes and still make investments with good returns and liquidity.
How can you sell your investment without paying capital gains taxes? Speak with the professionals at Defertax.com.
Now you can legally defer the capital gains taxes on up to 100% of your transaction’s proceeds and generate a dependable income stream for retirement, investment, charity, or whatever you desire.
Vulture Fund Strategies
If you’re a real estate investor, you’ve probably ran into the situation where now is a great time to sell but a bad time to buy. This makes traditional tax deferral methods like the 1031 Exchange a problem.
The 1031 Exchange requires a real estate investor to identify their potential replacement property in 45 days and close the purchase transaction in 180 days or pay the tax.
This means you only have 180 days to find and close on the right property. This restriction can be problematic if inventories are low or your deal falls through.
Now you’re stuck with either paying 25% to 50% of your hard earned money in taxes or buying a sub-optimal property at too high a price or in a bad location.
Wouldn’t it be wonderful if you could sell your property now, defer the capital gains taxes owed, and earn income on your money while you wait for the right opportunity to present itself?
With our Vulture Fund Strategies, you’ll have tax deferred cash available to buy that new opportunity, pay no tax on the purchase, and still earn income off any money not used.
If your strategy is to Downsize and your using traditional tax deferral options like the 1031 Exchange, you’re facing two major obstacles to reaching your goals. 1) You need to find the down sized investment property within the 45 identification window and close the transaction in 180 days or less to avoid paying capital gains taxes. 2) You’ll need to pay taxes on any gains above the price of the newly purchased property.
What can you do to defer paying capital gains taxes on 100% of the proceeds from this transaction and invest the remaining money.
One of our many downsizing strategies allows you to take tax free basis out of your property prior to sale, purchase your downsized property, and defer taxes on the remaining cash proceeds from the sale of your property.
No 1031 Exchange and no 180 day window to work against.
Estate Planning and Legacy Building Strategies
Let’s say you decide to sell one of your larger investment properties. You want to create an income stream so you can slow down, but your wife wants to save the money to leave a legacy for your children or charity. What can you do?
With the right combination of Tax Deferral Options, you can do both. You can have an income stream and a legacy you can pass on to your heirs or charity. This is just one of the many scenarios that are possible.
We’ll Find The Right Strategy For You!
There are multiple Adjusted Gross Income Reduction Strategies, Downsizing Strategies, Cash Out Strategies, Estate Planning Strategies, and Legacy Building Strategies. They are too numerous to list here, but we can find the right strategy for you if you give us a call…
Your Tax Deferral Consulatants!
We’re committed to helping you achieve your financial goals…
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