swsop
Member
Real estate prices may have peaked, which would make this a good
time to sell. However, an outright sale can produce a steep tax
bill. In additional to federal tax on long-term gains you might
owe state and local taxes as well as tax on any depreciation
deductions you've taken.
All of these taxes can be deferred by selling to a "private
annuity trust" that you create.
The trust pays for your property by offering you a lifelong
annuity.
Then the trust sells the property to a third party. If the amount
paid by the buyer is the same as the value of the private annuity,
the trust will not have a taxable gain and won't owe any tax.
Once the trust starts paying you the annuity, the tax bill you've
avoided will be spread out over your life expectancy. The income
you receive will come from a portfolio funded with the full
pre-tax sale proceeds.
SWSOP
time to sell. However, an outright sale can produce a steep tax
bill. In additional to federal tax on long-term gains you might
owe state and local taxes as well as tax on any depreciation
deductions you've taken.
All of these taxes can be deferred by selling to a "private
annuity trust" that you create.
The trust pays for your property by offering you a lifelong
annuity.
Then the trust sells the property to a third party. If the amount
paid by the buyer is the same as the value of the private annuity,
the trust will not have a taxable gain and won't owe any tax.
Once the trust starts paying you the annuity, the tax bill you've
avoided will be spread out over your life expectancy. The income
you receive will come from a portfolio funded with the full
pre-tax sale proceeds.
SWSOP