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Updated over 2 years ago,

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1031 Exchange or Charitable Remainder Unitrust?

Posted

I'm nearing retirement and considering what to do with a few rental properties that would net about 900 K, if I avoided taxes. I've owned both properties for about 20 years. 

I have been thinking it would be nice to receive regular, passive income, without being an active landlord.  Perhaps a 1031C into a commercial property with something like 1031Crowdfunding.com, but quite frankly I'm nervous about the risks of doing an investment like this, not having a lot of experience or knowledge in this area.

The other option I've been reading about is a CRUT or Charitable Remainder Unitrust, where you put the real estate in an irrivocable trust, sell the real estate, invest the money, and receive yearly payments from the trust until death, at which point the remains go to a charity of your choice. Frankly, the CRUT sounds less risky, but would like to understand the ongoing costs of a CRUT and what the downsides to this approach would be. Also would like to know if there are other options I should be considering.

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