How to defer/avoid capital gains taxes on the sale of my family business?

[Phillip Wright]

Hello,

My family will soon be selling the family business, roughly 3-4 million dollars is the estimated sale price. We hope to purchase/build residential rental properties with this money, we already own outright two plots of land in a very HCOL area so building 2 duplexes would be the ideal next step.

How do we go about selling the company in a way that minimizes capital gains taxes and open the funds up to be used for residential purchases/builds?

I have been researching and some recommend a deferred sales trust, monetizes installment sale, 1031 exchange (though im not sure the commercial business sale allows for the transfer into residential, i could be wrong ?)

Disclaimer, we will be talking with multiple CPA's, financial advisors, and real estate attorneys, just wanted to get some initial points of view on the topic.

Thanks.

[Chris Picciurro]

Here is my advice - first run a tax projection to determine the tax due if you do nothing. Then consider the following:
Qualified Opportunity Zone fund
1031 exchange
Tax-advantaged investments that provide you deductible (business not real estate) losses
Harvest capital losses
Cost segregation studies on new property (land is not depreciable)
Deferred sales trust

Feel free to message me with any questions.