Important Tax Mitigation Strategies for Real Estate Investors
Whether you are thinking of selling an investment property, or it’s currently in escrow, or your escrow closed less than 180 days ago, we have solutions that can defer or eliminate much of your capital gains tax obligations.
Defer capital gains tax by utilizing the provisions of Section 1031 of the Internal Revenue Code. We know the requirements of the tax code, and we can advise you on investment choices for replacement properties, in particular DSTs, which are the partial ownership structure of choice for 1031 exchanges. A DST (Delaware Statutory Trust) permits fractional ownership where multiple investors can share ownership in a single investment property or a portfolio of properties, which qualifies as replacement property as part of an investor’s 1031 exchange transaction. A DST relieves you of routine decision-making and management responsibilities and places them in the hands of an experienced sponsor-related trustee and institutional-grade property management company. Replacement properties are available in nearly all real estate classes, including Multi-Family Apartments, Healthcare, Self-Storage Facilities, Retail, Industrial, Office and Student Housing.
Eliminate much of your capital gains tax obligation by utilizing investments in Qualified Opportunity Zones (QOZ). Created by the 2017 Tax Act, QOZ investments provide benefits for taxpayers looking to prevent taxation of capital gains, which will also assist the real estate market in 1,000s of economically distressed communities across the country. The bottom line is that this may eliminate much of your capital gains taxes, whether the gains come from investment real estate, sales of stocks or sales of collectibles such as art, classic cars, coins, stamps or even wine. If you’re planning to take a capital gain on the sale of any of these items, or if you have sold any of these asset classes within the last 180 days, please consult with us. You have up to 180 days after the sale to make a QOZ investment and obtain the favorable tax benefits.
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