how to buy 60 units tax free to the owner. owner will finance if needed.

[Mark S.]

Hey BP Nation!, 

i have a question and i hope I'm posting it in the right place. 

so, one of my mentors in this business is considering selling his portfolio as he is 'up in age' now. after many discussions about his exit strategy he told me today that he has an offer on the table on the table right now. someone wants to buy al his properties. he doesn't want to sale and pay all the capitol gains taxes, and thereby lessen the estate he would leave to his only son. 

there are 60 b- c+ units across 2 cities. no mortgages. no vacancies. 

is there a strategy that will allow for a transfer to a new owner without the big tax hit?

[Linda Weygant]

He may also be able to see some tax relief if he does an installment sale (kind of like an owner carry of the note, but slightly different).  This will allow him to spread the capital gains over the term of the sale.

The very, very best way would be to hang on to the properties and will them to his son.  His son will receive a "stepped up" basis on the valuation and can either then take over the rental income from there or sell the properties using the value on the day of death as the basis, thus generating very little capital gain.  However, if the total amount of the state exceeds the estate tax limits, there may be some tax payable within the estate. 

He should talk to a CPA and/or an estate attorney to figure out how to best structure his particular scenario.  It's tough to say what would be best without knowing the larger picture.