All Forum Posts by: Nick Drury

Hello Fellow BP investors!

I refinanced a property last year and my accountant now tells me the interest that I pay on the new loan is not tax deductible, due to the 2017 Tax act and new interest tracing rules added.

Has anyone navigated the world of interest tracing and found creative ways to continue to deduct interest on the mortgage after a cash out refi?

Thanks!

Nick

When selling a portion of a property to a partner, is it possible to sell the “basis” value portion of my property and not the “capital gain” portion such that I don’t incur capital gains taxes upon sale?

When selling stocks it’s possible adjust whether selling older or newer shares (first in-last out or first in-first out) so one can effectively choose to sell shares that have more or less capital gain associated. Curious if real estate tax rules have similar flexibility.

Any guidance would be greatly appreciated. Thanks in advance for any help or suggestions!

@Eamonn McElroy , Thanks!

I will study up on the section 754 election and ask our tax advisor/attorney about how it may apply best to our situation.

If you don’t mind, I had a second scenario/structure I would be curious of your opinion on:

My partner currently owns Property A that he’s offered I buy into. If I were to find another like kind property that we both wanted to buy together (Property B), could we form 2 partnerships, the first partnership buying Property A from my partner, and via 1031 exchange he transfer his Property A gains into his share of our partnership in Property B? I believe it would be quite straight forward that I would get the benefit of buying property A, and our new partnership benefits from restarting depreciation for that Property, and my partner benefits by being able to 1031 and defer his gains into a new property (Property B). In that scenario, we’d now own 2 properties together, each with depreciation starting from zero, and my partner wouldn’t get hit with a large tax bill.

Does that sound correct?

Thanks for any help!

My business partner owns a large multi-family property that he’s offered I buy into in the near future. I’m very interested in the deal, but he’s owned it for a long time and there is very little depreciation remaining beyond ongoing capex.

Are there any ways to buy into an existing LLC that would provide me as a new LLC partner depreciation to shelter my gains for years to come (effectively resetting depreciation for me) but wouldn't require my partner to sell the property to a new LLC we setup together, exposing him to significant taxes on his gains?

Thanks for any input!