We are thrilled to announce that Prestige Accounting Services Group (previously Prestige Wealth Accounting Group) has joined forces with Bacchetta & Company in an exciting new partnership!
Seek Tax Advisor Recommendations Before Selling an Investment Property
The real estate market is red hot, and plenty of folks nearing retirement and holding investment property see now as an excellent time to offload their real estate assets and reap the profits. If you’re one of them, then - tempting as it may be - make sure that you talk to your tax advisor before making that move.
Purchasing rental properties has become an extremely popular investment strategy. In fact, experts say that those nearing and past retirement age have accumulated about $6.4 million in net worth tied to those holdings. As attractive as that income is, it can also create responsibilities around rent collection and property management that lose their appeal pretty quickly. It’s no wonder that, between those responsibilities and skyrocketing valuations, many people are looking to get out.
While a sale now makes perfect sense, it’s important to go about it the right way to minimize the tax implications. There are a variety of tax-planning strategies that will provide you with significant benefits. These include:
A 1031 exchange – This option would mean exchanging the property that is currently owned and deferring the capital gains by identifying the replacement within 45 days and completing the exchange within 180 days.
Investment in an Opportunity Zone – This option allows investment property owners to sell their property and then roll their gain on it into the Opportunity Zone Fund. Doing so provides tax-deferred growth over the next four years.
Transfer the property to a charitable remainder trust before it is sold. This process exempts the gain from capital gains tax and allows it to be reinvested, with the original owner receiving the income during their lifetime, and the balance transferring to the charity after they die.
Holding off on selling until a low-income year. As tempting as it may be to take advantage of the current market, it may make more sense to hold off until after retirement, when your income is lower and the tax hit may not be as extreme.
What’s most important is that rather than jumping into a sale based on your impulse to maximize your profit, you give consideration to the tax implications and take a measured approach that will provide the greatest long-term benefits – or at the very least minimize the tax consequences that would inevitably follow significant gains. Even your Medicare costs can be affected by a big gain, so careful planning is a must.
If you own an investment property and are considering selling, take the time to check with our experienced tax advisors. We’ll provide you with guidance on how best to leverage your position.
More About Us
Get to Know Prestige Accounting Services Group (previously Prestige Wealth Accounting Group)
Offices in Flemington, NJ and Califon, NJ
Our Mission: At Prestige Accounting Services Group (previously Prestige Wealth Accounting Group), we are on a mission to redefine the tax experience for individuals and small businesses. With a focus on personalized service, strategic planning, and expert guidance, we aim to empower our clients to succeed financially with confidence and ease.
Expertise in Action: With a wealth of experience and a team of dedicated professionals, we specialize in individual and small business tax preparation. While we excel in all areas of taxation, our passion lies in serving the unique needs of small business owners in New Jersey. We understand that small business taxation requires specialized knowledge and attention to detail, which is why we go above and beyond to ensure our clients receive the guidance and support they deserve.
Tailored Solutions for Every Client: Whether you're a high-net-worth individual seeking comprehensive tax planning or a small business owner in need of accounting and bookkeeping assistance, we have the expertise to meet your needs. Our team takes the time to understand your specific situation and develop customized solutions that align with your goals and objectives.
Why Choose Us?: What sets us apart from other New Jersey tax firms is our commitment to excellence and innovation in the field of taxation. We don't just prepare tax returns; we provide strategic insights, proactive planning, and actionable advice to help our clients achieve their financial goals. With a team of two CPAs, an EA, and an ERO, we have the expertise and resources to deliver exceptional service and results.
Your Success is Our Priority: At Prestige Accounting Services Group (previously Prestige Wealth Accounting Group), we measure our success by the success of our clients. We are dedicated to building long-lasting relationships, providing unparalleled service, and helping our clients thrive in today's ever-changing tax landscape.
We can't wait for you to experience the Prestige Accounting Services Group (previously Prestige Wealth Accounting Group) difference.
Tax & Small Business Updates
Get the latest in tax and small business updates and issues that affect your finances and growth prospects.