- This topic has 42 replies, 10 voices, and was last updated 17 years, 2 months ago by
SD Realtor.
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October 17, 2007 at 5:14 PM #89732October 17, 2007 at 5:14 PM #89741
SD Realtor
ParticipantI am NOT a CPA or an Attorney. I have posted about these vehicles a long time ago but do not recall the response. Similarly the IRS may have tightened up on the rules… Ask your CPA or a trust attorney about a private annuity trust. Basically these are vehicles for highly depreciated properties that enable potential sale of the property and a massive tax deferment. The property is transferred to a trust. The sales proceeds go to the trust. The money is in the trust and can be invested to earn mo money. You have to take an annual payout at which you are then taxed. As you can see this is a very nice way to defer taxes, and earn income on the nut.
Note this is HIGHLY speculative on my part. I FULLY EXPECT other posters here to blow this out of the water or that the IRS has clamped down on these vehicles. Also this is something that is highly specialized. Of course now I just reread your post and see that you have already sold your property. So this is now a moot post as you would need to move it to a trust prior to the sale. Also the private annuity trust is highly specialized… oh well… I will not delete this…
If you are gonna 1031 make sure the funds go to the accomodator… etc… dont screw that up…also if your gonna 1031 do it with the knowledge of future depreciation and that you will simply ride out the storm.
Personally I have missed the boat many times on pocketing alot of cash simply to avoid paying the government. Seeing as the tax rate in the years ahead WILL BE MUCH HIGHER (another speculative statement but I believe this to be true) then it is now, it may not be a bad idea to pocket the cash now…
Do you think taxes will be lower in the next administration?
SD Realtor
October 17, 2007 at 5:19 PM #89736gb
Participantpay a few bucks and get proper counsel
I have found that there are many very bright opinions on this board. Really it is a matter of paying taxes of 200k or take a chance on the future real estate market. Other than this blog, I know of no other “proper counsel”.
October 17, 2007 at 5:19 PM #89745Participantpay a few bucks and get proper counsel
I have found that there are many very bright opinions on this board. Really it is a matter of paying taxes of 200k or take a chance on the future real estate market. Other than this blog, I know of no other “proper counsel”.
October 17, 2007 at 5:20 PM #89738Ricechex
ParticipantIt is completely appropriate to capitalize Realtor. Any title can be capitalized—Investment Banker, Teacher, Social Worker, Box Office Manager, Engineer, Day Care Provider, Home Loan Specialist, Salesperson, etc….
October 17, 2007 at 5:20 PM #89747ParticipantIt is completely appropriate to capitalize Realtor. Any title can be capitalized—Investment Banker, Teacher, Social Worker, Box Office Manager, Engineer, Day Care Provider, Home Loan Specialist, Salesperson, etc….
October 17, 2007 at 5:27 PM #89744NotCranky
Participantgb,
What kind of property did you sell and what kind of properties and locations are you comfortable with. That info might help would be respondents(Realtors or otherwise).
October 17, 2007 at 5:27 PM #89753Participantgb,
What kind of property did you sell and what kind of properties and locations are you comfortable with. That info might help would be respondents(Realtors or otherwise).
October 17, 2007 at 5:28 PM #89746davelj
ParticipantFour out of five times I’d say find the best 1031 exchange you can, do your due diligence and if it makes sense then do the exchange and avoid the taxes.
Right now, however, unless the exchange really looks juicy… I’d just pay the taxes and wait. That’s just me.
Don’t get me wrong, the 1031 exchange is a great thing. But I’ve found that a lot of people go through a lot of brain damage to avoid paying taxes and end up just wishing they had paid the taxes and been done with it. Just something to think about.
October 17, 2007 at 5:28 PM #89755ParticipantFour out of five times I’d say find the best 1031 exchange you can, do your due diligence and if it makes sense then do the exchange and avoid the taxes.
Right now, however, unless the exchange really looks juicy… I’d just pay the taxes and wait. That’s just me.
Don’t get me wrong, the 1031 exchange is a great thing. But I’ve found that a lot of people go through a lot of brain damage to avoid paying taxes and end up just wishing they had paid the taxes and been done with it. Just something to think about.
October 17, 2007 at 5:42 PM #89759Participantkind of property did you sell?
I sold a 5 plex with cash flow and am looking at a sfr vacation rental in Santa Ynez. Thanks everybody for their input. I am leaning towards a compromise and might buy one property in the 800k range and pay taxes on the remaining 300k
October 17, 2007 at 5:42 PM #89750Participantkind of property did you sell?
I sold a 5 plex with cash flow and am looking at a sfr vacation rental in Santa Ynez. Thanks everybody for their input. I am leaning towards a compromise and might buy one property in the 800k range and pay taxes on the remaining 300k
October 17, 2007 at 6:21 PM #89764HLS
ParticipantHas the transaction already closed ??
If you have taken the money from escrow, it’s too late to do a 1031 exchange.
October 17, 2007 at 6:21 PM #89773ParticipantHas the transaction already closed ??
If you have taken the money from escrow, it’s too late to do a 1031 exchange.
October 17, 2007 at 7:00 PM #89769ParticipantHas the transaction already closed ??
Funds are with an accomodator and must close Escrow on an upleg property by Dec 15.
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