I'm looking to close on a 14 unit apartment complex in Cincinnati. Currently the estimated close date is December 28. I'm curious, are there any reasons to move the close date back into the New Year. Or, conversely, should I make sure I close this for some reason. The only thing I could think of it would change which year I can deduct my closing costs. Other than that I'm not sure. Just checking to see if anyone else had an opinion. If it helps, I currently own 1 quadplex in my name. I will be spinning up my first LLC for this apartment.
@Michael Hooper That's a fantastic question. And one I wish I would've asked at the beginning of my RE career.
A property tax increase could be a huge reason to wait.
I'd check with the assessor in that district to see what purchasing it at the new price would have on the taxes. I'm looking at 300k property in my market in South Carolina right now and it is currently vastly under-assessed at ~95k.
If I close on or after 1/2/18 then my 2018 property taxes will be at the 95k assessment (~$2,700).
If I close on or before 12/31/17 then my 2018 property taxes will be at the 300k assessment (~$8,700).
My county evaluates assessments based on who is on the deed at the first of the year. If there's no change on January 1st, then they wait until the next year to adjust.
I’m selling a lot of my turnkey rentals and since I had a lot of cap gains want to delay the big tax bill for as long as possible.
Most closing costs are usually added to the basis of the property and depreciated over its useful life(MACRS).
The only closing costs that I can think of that are currently deductible is accrued interest paid and prepaid property taxes...but this shouldn't be a reason to push up or push back closing.
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