Owner won't sell because of capital gains!
Hello-
I have been spending a considerable amount of time calling multifamily owners in my farm area and keep running into the same problem. Many of the owners would love to sell their property but have owned it for 30+ years and don't want to pay capital gains on the sale. Their response is that they are going to wait until they pass away and their children will inherit it and take advantage of the step-up basis to avoid capital gains. 1031-exchange is not an option because these people are old and don't want to own other property.
I have been reading about seller financing via the creation of a note. The seller would qualify for installment method of reporting capital gains. If I am reading it correctly this would reduce taxable income significantly but still not to the effect of a step up basis in an inheritance scenario.
I am meeting with an owner of several properties on Saturday. He purchased them in 1950 and therefore would pay significant capital gains tax on the sale. What argument can I make that it is in his best interest to sell them to me?
Thanks for your help!