All Forum Posts by: Sharon Carson

Pay the tax! Here is why: You are retired and can use the income. No need to keep levering up until you die! Rolling into a DST paying a 5% return is paltry and will cost you exchange fees, banking fees, broker fees etc, not to mention you are locked up for a while. Take your profit and roll it into a few short term mortgage note funds paying 10-14%. You will make more money and in a few years that higher dividend will offset any capital gains you paid.

I was thinking of just paying the tax. I never considered this idea of short term mortgage notes! Brilliant! Thank you!

0 Votes

Hilo, Hawaii

Quote from @Kyle Winther:

You can do a 1031 exchange into a leveraged DST and pickup debt in your exchange to eliminate the boot in your transaction. There are plenty of leveraged DST portfolios available.

There are requirements to invest into a DST, require you to be an accredited investor. Do you qualify as an accredited investor?

Nope, I am not. But Thank you for your input!

0 Votes

Hilo, Hawaii

Quote from @Bill B.:

I assume you don’t have $154k cash laying around. (You don’t need the loan if you add cash.)

Why are you doing the exchange? If you aren’t buying larger or borrowing more? (Switching states? Or?)

Do you have any friends/relatives who would either borrow you the money or partner with you? Could you sell your primwry and exchange in to a 2-4 unit where 1 unit is your new primary? What percent of your purchase is the $154k? (It should be easy to get a loan for 20-30% of the purchase (The rental income will provide the income at that LTV or you shouldn't be buying it.)

I’m not a huge fan but you could also do the smaller purchase and then do a cost segregation on the new property to try to erase some/most of the taxable gain.

No, I don't have the cash!

I'm considering the 1031 because of the huge capital gain I must pay.

And I AM switching States. Having read through these suggestions, a DSCR may be the way to go. Those loans aren't available in all States, I am moving to CO.

Anyone familiar with that loan in CO?

0 Votes

Hilo, Hawaii

My property is currently listed for sale. On one hand, I want to do a 1031 exchange, as I'm faced with an enormous Capital Gain.

However, I have $154k loan on the property. It will get paid off.

BUT, to qualify for the 1031 replacement property as EQUAL in value, I will need to get a NEW loan for that $154k.

My issue is: HOW!? I'm retired, with NO substantial income, except the Rental income!! Unless I'm missing something, I would have to find a "hard money Lender." With interest rates as they are, this is NOT an appealing option!

If I do NOT replace that $154k loan, it would then be considered "BOOT". (Correct?) As such, I must pay taxes on it.

Would it be better to just eat it and pay the taxes on that boot, or go with that "Hard money" Lender's rates? Again, I show hardly any income, so how can I even do a refinance once the 1031 is complete?

1 Vote

Hilo, Hawaii

good idea! Thank you!

0 Votes

Hilo, Hawaii

I have a troublesome tenant who most likely will not move out by his 45-day Lease termination notice. He would be a "holdover" tenant, and I really don't want to do the eviction routine, as my property is currently listed for sale! I just want him OUT.

If I offer him "Cash for Keys", is there any kind of LEGAL FORM , or contract that I should use to seal the deal ?? Binding? Is there a protocol for this procedure?

I don't want him finding loopholes, and not move!

Thanks

0 Votes

Hilo, Hawaii

HARPTA knowledgeable!

I need help to "crunch the numbers" HOW to sell my rental property!

Mahalo in advance!

0 Votes

Honolulu, Hawaii

@Dave Foster Thanks for your reply!

"Your adjusted cost basis is the purchase price of the land plus the cost (not value) of the improvements"

= this is just it! My current "cost basis" reflects only the land and infrastructure. It does NOT include the home, or detached garage as IMPROVEMENTS!

I have considered a 1031 in the past, and I will certainly keep your contact info!

1 Vote

Thank you, Joshua!

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Hello!

I bought raw land. I have built a house and a detached garage.

My County Property Tax Assessment shows the correct valuation.

However, the "cost basis" that my HRBlock person tells me is approximately $400,000. LESS than what it should be!

This means that when I go to sell it, I will be paying a ridiculous amount of capital gains! Unless I can remedy this mistake!

Thanks so much for asking!

0 Votes

All Forum Posts by: Sharon Carson

Sharon Carson has started 7 posts and replied 18 times.

Post: To boot or NOT to boot?!

Post: To boot or NOT to boot?!

Post: To boot or NOT to boot?!

Post: To boot or NOT to boot?!

Post: Cash for keys Protocol?

Post: Cash for keys Protocol?

Post: Need a Real Estate Akamai CPA in Hawaii

Post: Need a Real Estate Akamai CPA in Hawaii

Post: Need a Real Estate Akamai CPA in Hawaii

Post: Need a Real Estate Akamai CPA in Hawaii