How can I sell my property without losing 40% in taxes?

You have more options than you might think…

With the 1031 Exchange, your cost basis follows you. This applies to:

  • Farm / ranch
  • Commercial property
  • Multi-unit housing
  • Residential rentals
  • Vacation property (there are limits on how often you can use them)
  • Other investments (real estate investment trusts, etc)

You can also pay the tax. It resets your cost basis to the amount net of tax.

  • Any new investment (other than land) can now be depreciated.
  • Tax free bonds earn interest tax free (state and fed) so depending on income tax bracket, this provides a reasonable return. Depending on the amount of investment, a money manager might make sense to better manage the ups and downs of the value of the portfolio.

An experienced real estate agent like A. Bruce Johnson & Associates can help you evaluate all of these options and weigh the associated risks and benefits.