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March Newsletter

Yes, You Can Sell Your Highly Appreciated Property Tax Free

Thompson Von Tungeln

by Sonia C. Lee, Esq. Partner

Many homeowners believe that the only way to sell your home without paying hefty capital gains taxes is to rely on the primary residence exclusion of gain which only provides a maximum of $250,000 per person in capital gains tax relief and only if you qualify. In addition, most real estate investors and residential or commercial property owners are under the impression that the only way to avoid capital gains taxes on the sale of their investment or commercial property is to enter into a 1031 exchange transaction which requires that you trade in your existing real property for another property without being able to take cash out or diversify into non-property assets.


This is simply not true!


There are a number of ways one can avoid capital gains taxes on highly appreciated real property without any reliance on the primary residence exclusion or a 1031 exchange. One very effective method is to sell property through a Charitable Remainder Trust (“CRT”). Well established and understood by leading private banks, brokerages and the IRS, a properly designed CRT sale of assets is completely free of capital gains taxes and can provide decades of significant tax-efficient income for you and your children before a small share of the total accumulated benefits is given to a charity of your choice at the end. In addition, you can typically choose between a tax-free partial cash-out from the sale or receive a substantial income tax deduction in addition to avoiding paying capital gains that you can use to offset other taxable income. Finally, CRTs can also be used to sell highly appreciated stock.

Current interest rates make CRTs particularly compelling so please call us today at (661) 945-5868 to make your no-cost appointment to explore whether a CRT is right for you.

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