I’ll keep it short, I am 22 as of now own 4 doors, my grandfather has several small apartment buildings he is selling off and I am buying one of his 18 unit buildings and it will be done under seller financing terms. He has owned this one for 40 years and it was fully depreciated. The payments towards the property are going to be made to a trust that will be distributed to his children upon death. We are trying to avoid paying capital gains as much as possible. We are both open to creative ideas. We are not getting far with our accountant. If anymore info is needed I will provide asap, thank you!
Sorry to be morbid, but why not leave the property in the grandfather's name? The best way to avoid taxes is death... "death and taxes" ... "swap 'till you drop'
That would avoid the capital gains tax and depreciation unrecapture.
Otherwise, I think there is a trust setup for this, or something similiar that will need to be finagled. I just can't remember so late... You really should speak with an estate planner, not an accountant.
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
3y
The best way to avoid those nasty taxes is to get rid of your money and possessions before you die. 'Gift' it all to your heirs while you are still alive. Ask your grandfather to explore that with your current accountant or a new one. There is an 11 million dollar exemption-22 million for married couples. I am not an accountant but there may be a deal structure in there somewhere for y'all.
I'll be thinking about some advice on this. But I do want to say, good job Tanner. Impressive moves at your age. Keep it up.
Thank you! So far have hit a bunch of dead ends with it and just don’t want to waste all of my cash paying their gains tax. any ideas super appreciated
Sorry to be morbid, but why not leave the property in the grandfather's name? The best way to avoid taxes is death... "death and taxes" ... "swap 'till you drop'
That would avoid the capital gains tax and depreciation unrecapture.
Otherwise, I think there is a trust setup for this, or something similiar that will need to be finagled. I just can't remember so late... You really should speak with an estate planner, not an accountant.
Sorry to be morbid, but why not leave the property in the grandfather's name? The best way to avoid taxes is death... "death and taxes" ... "swap 'till you drop'
That would avoid the capital gains tax and depreciation unrecapture.
Otherwise, I think there is a trust setup for this, or something similiar that will need to be finagled. I just can't remember so late... You really should speak with an estate planner, not an accountant.
We were thinking something like that, possibly a self cancelling note. The only thing about that is I can’t claim depreciation which is a big blow, right?
Well, a self canceling note doesn't sound legal... I thought the irs frowns on just forgiving debt.
Since you say you've been at this already, what exactly are you looking for, now and in the future? Or, is it just now? Even if it is "everything," what is that to you?
Well, a self canceling note doesn't sound legal... I thought the irs frowns on just forgiving debt.
Since you say you've been at this already, what exactly are you looking for, now and in the future? Or, is it just now? Even if it is "everything," what is that to you?
As of now we are just trying to do a private transfer of the property between us two without him having to fall on the sword to do me a favor, the idea of him keeping ownership and “leasing” it to me is something we have talked about and him leaving it to me through inheritance but it would help a ton if I could claim depreciation and I don’t think I can.
So, at first thought transfer it on death so you get the step up in basis and can restart the depreciation, work it out on i'm hoping its owned in a LLC so you can get the income now.
Otherwise, you'd have to purchase from him (even with him financing you and whatever you guys want to do about the Note) and the higher the "better" in terms of setting up your depreciation. And he would 1031 that into something else to defer the depreciation recapture and capital gains.