BiggerPockets

:roll: [b]Please help me with this. We are selling our fourplex in Louisiana. We live in California. Is there anything we can do with the proceeds we receive from the sale to defer the capital gains taxes OTHER than a 1031 Exchange??

Thank you![/b]

I appreciate your quick reply. We will check into that.

What do you want to accomplish?

But what is your objective? Are you getting out of real estate all together? When you say other than a 1031 exchange, does that mean that you want to get out of real estate? If so, then you can consider the following:

Charitable Remainder Trusts - these allow you to contribute your property into the Charitable Trust, get an immediate tax deduction for the contribution of an appreciated asset to a Charitable Trust, avoid the capital gain and depreciation recapture because the Charitable Trust sells the real estate and not you, live on some of the cash flow because the sale proceeds are reinvested in assets that produce more cash flow, and more. However, the CRT is permanent, so it is usually not an appropriate strategy for most investors, especially younger investors.

Installment Sale Treat - you can carry back a note (seller carry back financing) on the sale of your 4 plex. This defers the recognition of your capital gain over the term of the note on a prorata basis as principal payments are made. It does not avoid the taxes, just defers them. You would recognize your depreciation recapture income taxes immediately.

upREIT or 1031/721 - you can ultimately exchange into a Real Estate Investment Trust. This allows you to defer your capital gain and depreciation recapture income taxes into a REIT. The REIT usually is or will go public, so you have more liquidity, can choose when to sell and recognize your taxes, if ever, remain diversified in real estate without any management headaches because now you own a security that invests in many commercial properties. You can never 1031 exchange back into real estate because you no longer own real estate.

1031/TIC Investment - you can 1031 exchange into a tenant-in-common investment property (TIC property). The TIC is a fractional interest or co-ownership in large commercial real estate properties. You exchange into it on a tax deferred basis and no longer have any management headaches because there is a commercial property manager that handles everything. You can usually get cash flow of 5 to 8 percent on your equity.

There are pros and cons with each option listed above, and each option is not right for every investor. Hope this helps.

The last two are sold through securities brokers. Where are you located and I can send you a referral to speak with. Also, I would attend a couple of exit strategy seminars as well. Let me know where you are located and I'll send you some information.