What Brett Recommend an Operator That's getting Ready to Sell The

[Brett P Swarts]

Anthony Scandariato:

What would you recommend for, let's say an operator that's getting ready to sell their property? And they want to consider the strategy, just given the market fundamentals right now? When should they engage?

Brett Swarts:

That's a great question. First of all, we don't charge a dime unless you do the deal. So, let's say you're selling a property and you're like, I'm just curious to see who's gonna work for me. But I want to pay all these tax attorneys and CPAs to work all this out. It's for capital gains tax solutions jumps in, and we're going to give you clarity on your options. We're going to tell you the 1031, we talked about the Delaware Statutory Trust, by the way, I've closed Delaware Statutory Trust, I've closed 1031s, have closed Deferred Sales Trust. You want to always make sure you're working on these actually close the deals. That's what we've done. So come to us, go to capitalgainstaxsolutions.com, and you can apply for a no-cost consultation call. You're gonna answer some basic questions like what's your basis? What do you buy for? What do you pay for it? How much debt do you have? What are you planning to sell it for? But we need to do it before the closing of escrow. We need to be early, ideally released 30 or 60 days early, we definitely need to be before the buyer removes all contingencies, especially for a business high-end primary home, which we just did a deal in Cupertino $3.1 million sale for a gal who was facing a $400,000 in capital gains tax above and beyond her 121 exclusion, which if you live there to the last five years, 250 or single 500 if you're married, but she sold took that illiquid asset deferred all the tax and now she's living off the interest. We had to do that before the closing of escrow. She doesn't have a 1031 option right. Now, if investment real estate you have a 1031 option so you can save a failed 1031 exchange. That being said, you want to work with an accommodator who's actually done deferred sales trust, right. Don't work with the old blockbuster accommodator who's just gonna say no, make sure you're getting with someone who's looking out for your best interest and has given you the Netflix option, which is the new better way to do things. At least have the option.

By the way, you can have all of that and still do your 1031. If it fails, no problem. I mean, if it doesn't fail, you do your 1031 no problem. You don't owe us anything, right. So that's the first thing. If you're a syndicator, you have what's called carried interest and a lot of folks syndications that we work with before they meet us. They're all just everyone's paying the tax coming in with the money. They're buying this deal. They're owning it, managing it, selling it, and everyone's paying the tax again. So every time, Anthony, you're losing 30 to 50% of that gain with the depreciation recapture in the capital gains tax given the deal, right on the end, because a lot of people are selling the high-end primary home, selling the business, selling the cryptocurrency, right selling these highly appreciated assets, which are not 1031 eligible into syndication for real estate. So they pay the tax they show up and then you go do the deal. Well, the first thing you can do as a syndicator, say, don't do that. Use the deferred sales trust, let's do a DST with that sale. And then immediately the next day they can they could fund your syndication. Okay, up to 80% of the deal. So let's say with a million dollars in the trust $800,000 could go into Anthony's. We have to keep a little bit of liquidity into liquid diversified investment grade security. So that's a little bit of a downside for it versus 100% with the 1031. But that's okay, too, because the bank's gonna say hey, you're qualified for a loan, which is good. It's good to have some liquidity too. So that being said, that is a little bit of something people are like, I don't really like that like to have 100%. But that being said, we need to do that now. Now on the syndication side, when you go to sell some people might say I'm still lucid I block cluster I don't want to do this, this deferred sales trust. No problem, like no, it doesn't have to move. So in a 1031 exchange, typically the whole entity must move meaning that's why most syndicators don't do a 1031 because they got five people who want to get out. And they're like, we can't have the whole entity move. So they end up just paying the tax. Well, guess what, Anthony, you can do your own deferred sales trust, and a couple of other partners could do their own not commingled with each other completely separate. And the other 10 investors could just pay their tax, no problem, right. So it's completely flexible in that manner. So I'll pause there to make sure that answered your question.

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