Capital Gains Taxes
I'm interested in a tri-plex.An older couple in there 70's own it free and clear.He said he recently sold another property and the capital gains tax is killing him. His wife said she was thinking about selling it a few months www.ago.Is there some way I can buy or control this property and not have them in a position where the capital gains tax is killing them?
I'm facing the same problem. But on top of that we are increasing the "sales price" on paper so that I can get in with a little less out of pocket expenses, but the owner is worried that he is the one being hit with the capital gains taxes plus income that he won't actually recieve. I hope to find and aswer soon myself.
We typically see clients just like this where they do not want to pay any capital gain taxes, but they would really like to get out of the property management business.
They might be interested in looking into a Tenant-In-Common Property (TIC). The TIC is put together by a sponsor and then sold off in fractional interests. The majority of them have cash on cash returns starting at 6.5% to 7.5%. This way they could do a 1031 exchange into the TIC property and defer their capital gain taxes, get rid of property management headaches, and end up with a fractional interest in an institutional quality property.
This is a relatively new market that has become extremely popular in the last few years. If they are interested they need to be extremely careful in selecting the TIC Broker and TIC Sponsor they are working with. There are a lot of "get rich quick" syndicators jumping into the market. I would be happy to email or fax you a list of TIC Brokers that we have dealt with. Just remember, it is still up to the investor to do their own due diligence, but this product is perfect for this situation.
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