Can the Buyer help lower the tax burden on the Seller?

[Daniel Walker]

Hi Folks,

I am investigating an opportunity to purchase from another investor. I am wondering if there is anything at all that I can do as the buyer, to help lower the capital gains (or other) tax burden on the seller?

Cheers,
Daniel

[Linda Weygant]

The best way for the seller is to do an owner carry.  The gains are spread out over the term (usually anywhere between 3 and 7 years).  The Depreciation Recapture is all due in the year of sale, but the capital gains beyond that is spread out over the carry term.  No way to really reduce it (except take less of a gain on the property....), but you can minimize the hit by spreading it.