1031 into DST with Boot.

[Dan T.]

Can someone look at my novice numbers. 

The idea is to get is much out as low of tax rate as possible. Then do similar cash out again when DST renew, staggering DST's.

We don't need legacy just income to live.  We are in late 50's.

___________________________________________________________________________________________________

DST 2,700,000 @ 5.25% return , 141,750 income. Are DST fees included in 5.25 estimate I read some as high as 20% fees?

approx 50% depreciation on income, tax return income amount 70k. is that based on leverage?

Take 500k boot out and pay 15% cap gain tax, $75,000. Total return gain must stay under 580k

NIIT Tax 3.8% on 500k, 19,000?

Depreciation Recapture Tax. Total 300k Depreciation, 20% is 60k, x 25% rate, 15,000?

Total tax on 500k boot $109,000 remaining 2.7m goes into DST.

(if fall into 20% cap gain add. 25k on 500k)

[Dave Foster]

@Dan T., The calculation of what is taxable in your situation is relatively simple.  The calculation of how much this is - not so straight forward.  When doing a 1031 exchange you must purchase at least as much as your net sale and use all of the proceeds from the sale in your purchases.  If you take cash or purchase less than you sell you pay tax on that as "boot".  All of that is taxable.  However, some of it might be a capital gain.  Some might be depreciation recapture,  Your state makes a difference.  And there is actually a level at which your agi income makes a difference.

Safe to say that $500K is going to cost you a minimum of $100K and possibly up to $200K depending on all of those variables.  Which is close to what you're estimating.  But the range of possibility is  why everyone's been pointing you to your CPA to get specific.

But from a horse shoes and hand grenades level of granularity - you can access that $500K (realizing a net of $400K after taxes.  at $5.75% you'll give up around $28,750 in income annually but gain access to a net $400K in cash.  That ( and why you really need the boot) are probably the most pertinent questions.