For many investors and business owners, selling a highly appreciated asset creates an immediate challenge: what to do about the potentially significant tax liability that follows.
For real estate owners, years of appreciation can result in substantial capital gains and depreciation recapture when a property is sold.
While a 1031 Exchange can provide a powerful way to defer those taxes, navigating the exchange process—and determining the right replacement property strategy—can quickly become complex.
At Legacy 1031, our goal is to help clients defer, reduce and eliminate their tax burden using 1031 Exchanges, Delaware Statutory Trusts (DSTs), Opportunity Zone Funds, or Roth Conversion strategies.
When Taxes Matter
Our typical client comes to us facing a significant tax burden. Our role is to help them evaluate their options before the transaction occurs.
The challenge is not limited to real estate. Business owners, executives, and investors may also face significant capital gains when selling a business interest, highly appreciated stock, or other assets that have increased substantially in value. In these situations, the traditional 1031 Exchange may not apply, but other tax-deferral and investment strategies may be worth exploring.
Whether the goal is to transition out of actively managed real estate, diversify concentrated wealth, create a more passive income stream, or simply understand the alternatives before selling, we help clients understand the strategies available to address these tax consequences and determine which options may best fit their individual situation.
The solutions we provide are designed to help individuals and families looking for:
A desire to keep their money working instead of paying capital gains taxes (15-20%), depreciation recapture (25%), the Net Investment Income Tax (or Medicare Tax) (3.8%), and state taxes (0-13.2%).
An investment that offers a competitive monthly income stream with appreciation potential.
The ability to diversify their real estate holdings into institutional quality real estate much more effectively and efficiently than acquiring individual properties on your own.
A back up plan in the event that a replacement property acquisition falls through and doesn't close.
A desire to pursue other interests or enjoy their retirement years by eliminating the burdens of property management (toilets, tenants, and trash!)
The desire to relieve a spouse or children of property management and ownership responsibilities in the unplanned or untimely occurrence of a disability, dementia, or death.
A way to complete their tax deferred exchange with funds remaining in your Qualified Intermediary account.
Strategies to pass on accumulated real estate wealth to heirs with a stepped-up basis.
Security regulations limit us to working with accredited investors only. To be considered an accredited investor, you must have a net worth of at least $1,000,000, excluding the value of your primary residence, or have income of at least $200,000 each year for the last two years (or $300,000 combined income if married) and have the expectation to make the same amount this year.