Helping real estate developers maximize capital during the recovery
I used to feel bad for my developer friends. It is bad enough they pay income tax vs. capital gain tax on their gains, and the hit is doubled since their assets do not qualify for a 1031 Exchange. Talk about a tax deferral double whammy.
But now, there is help.
In this case, the proceeds are eligible for installment sale treatment (IRC 453), which means this income is eligible for a structured sale (see my previous post for more info). But let’s take it a step further. With Brook Hollow Capital, they can get a line of credit on their structure – all the way up to 97% of their pre-tax income! What a great way to maximize capital and reinvest into the business. In essence developers are taking control of their pre-tax income and becoming their own bank.
Developers now have a powerful tax deferral strategy to take full advantage of the recovery.
Chris Princis
[email protected]
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