Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 16%
$32.50 /mo
$390 billed annualy
MONTHLY
$39 /mo
billed monthly
7 day free trial. Cancel anytime
×
Take Your Forum Experience
to the Next Level
Create a free account and join over 3 million investors sharing
their journeys and helping each other succeed.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
Already a member?  Login here
1031 Exchanges
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated 8 months ago on . Most recent reply presented by

User Stats

1
Posts
3
Votes
Jacob Campbell
3
Votes |
1
Posts

1031 only option?

Jacob Campbell
Posted

I had intended to sell about $5.3MM of rental property and simply use the profits to may off debt on other notes.  However, I'm told my tax basis will be close to $2MM after depreciation recapture.  

Does anyone have any ideas on how to minimize that tax liability and still continue with my original intent, or is my only option a 1031 (I'm aware of DST but don't see that as a great option).

If so - any thoughts on rolling the profits from residential multi family sale into a commercial office building?   Is office still underperforming or is now seen as a safe investment again?

Most Popular Reply

User Stats

7,938
Posts
9,801
Votes
Bill B.#3 1031 Exchanges Contributor
  • Investor
  • Las Vegas, NV
9,801
Votes |
7,938
Posts
Bill B.#3 1031 Exchanges Contributor
  • Investor
  • Las Vegas, NV
Replied

You can still sell. If your basis is $2M and you clear $5M after selling costs you’ll owe somewhere between $450k (all capital gains tax) and $750k (all depreciation recapture.). So you’d still have plenty of funds left to pay off debt. 

You can’t use 1031 exchange funds to pay off existing debt so a 1031 doesn’t really solve your problem. You could sell the properties with the problem debt instead? Refinance thsi property to pay off the other properties? 

Loading replies...