What your financial advisor isn't telling you
What is your adjusted basis?
Do you know what it is?
Calculating adjusted basis
Initial Cost
+ Closing Costs
+ Capital Improvements
- Minus Depreciation
Taxes you face (lowest to highest)
Depreciation Recapture tax 25%
Capital gains tax 15-20% Fed + 7-10% MN State
Interest income tax (Ordinary Income Tax Rate)
Tips from the Pros on how to avoid tax
Take a higher price on a contract for deed with a lower interest since your principal payments are taxed at a lower rate than the interest
1031 Exchange into other real estate
Installment sale - Sell for higher price lower interest rate
Take the money over time until your kids get a step up in basis
Exchange for DST Membership Units
Roll into qualified opportunity fund
UPREIT your property Using a 721 Exchange
We are not offering tax or legal advice. We do, however, love working directly with your team of advisors to ensure that you are getting a comprehensive solution. Our approach is to be deliberate in our approach to the sale of your building to ensure you net the highest yield over time so you can achieve true financial freedom and spend your time doing the things you were called to do.
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