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Updated over 5 years ago,
Hive Mind- can you help structure the sale of this property?
We are getting ready to sell a single-family home that we've owned for less then one year. Our primary goal is to minimize the tax burden so that we can deploy as much of the gain from the sale into the purchase of new rental properties. I'd love some ideas into the some approaches for achieving this goal. The house is most likely a tear-down and will be purchased by a builder/developer who will build a new home or duplex. Let's use some round numbers for this example. PP=$200K, Sale Price=$300K, Gain=$100K Since a 1031 exchange is off the table, here are a few things we've come up with so far:
1. Trade - barter this property for cash flowing rental(s) (I have no idea how this is viewed from a tax perspective. Any CPAs know the answer?)
2. Seller financing - make a little bit extra cash, but this only differs the tax burden for the length of the note. (most likely 12-16 months)
3. Option & Sale - for $10K give someone an option to purchase for $290K after Jan. 1st 2020. The option could expire after 90 days. (once again just a delay on the tax burden)
Other ideas??
Ari