Exclusive Listings by Lloyd Wertheimer

Home

Commercial Real Estate

Westlake Village

Telephone
805.497.4557
FAX
805.496.3589
E-Mail Address
Lloyd@Westcord.com

Address
951 Westlake Blvd
Suite 101
Westlake Village, CA 91361

Regional Sales Director
 Cynthia Pettyjohn 

Cynthia Pettyjohn

Certified Exchange Specialist®
Vice President
(310) 755-8226
Email Cynthia
Quick Links

In This Issue

 

Calculating Immediate

Tax Savings

 Upcoming Webinars

 The Perils of No Estate Tax

 

Calculate Your

Exchange Dates - New!

 

 

  Calculating Immediate Tax Savings

 It is wise to determine the amount of your capital gain or loss prior to the sale of your investment property.  In fact, the earlier you determine the amount of your gain or loss, the better prepared you will be to structure the transaction to your maximum benefit.  If you have a capital gain and you plan to acquire “like-kind property” that will also be held for investment, you may wish to consider a §1031 tax-deferred exchange to defer the gain and build your wealth. 

Calculating the amount of your capital gain or loss is not as difficult as it may seem.  While there are several steps to the calculation, the most difficult part is ensuring that you are using the correct numbers.  As the saying goes, “the devil is in the details.”  

 A simplified formula for calculating the amount of your capital gain or loss is set forth below.  Let’s assume the following scenario:   

Step 1:

Calculate Your Net Adjusted Basis: 

Original Purchase Price    

 $500,000

Plus Improvements

+ $50,000 

Minus Depreciation

-  $60,000

NET ADJUSTED BASIS

 $490,000

Step 2:

Calculate Your Capital Gain or Loss:

Sales Price       

 $750,000

Minus Net Adjusted Basis

- $490,000

Minus Costs of Sale

-  $20,000

CAPITAL GAIN (Or Loss)

 $240,000

 Click here to read the rest of the article.

  

Sign up for our Upcoming Webinars

  

The Basics of the 1031 Exchange 

Thursday, March 18, 2010 

 

1031 Exchanges and Commercial Real Estate

Thursday, March 25, 2010

 

Click here for more information or to register. 

 

The Perils of No Estate Tax 

 As everyone knows, nothing is certain but death and taxes.  This year, however, there is a lot of uncertainty surrounding estate taxes, and a lot of misunderstanding about how the new rules will affect the average real estate investor. 

 In 2001, Congress voted to gradually phase out the federal estate tax, which had been as high as 55%.  The law was temporary, and although federal estate taxes have been completely eliminated in 2010, the law has a sunset date of December 31, 2010.  Without further action, the old estate tax rules will return on January 1, 2011.  Although many people expected Congress to intervene and change the law this year, so far nothing has happened. 

 The lack of federal estate tax this year is not necessarily good news for all people who inherit property.  For one thing, many states still have state estate tax.  In addition, with the repeal of estate tax, there is also a repeal of a significant benefit for real estate investors – the step up in basis.

 How does the step up in basis work?  Typically, when real estate is sold, the gain is the difference between the price at which it is sold and its basis, which generally is the price at which the investor acquired the property.  However, when you inherit assets, they receive a full step up (or step down) in basis to the fair market value of the asset at the time of death.   If heirs immediately sell an inherited asset, there is no taxable gain.  Unfortunately for real estate owners, the repeal of the estate tax ended this step up in basis benefit, which means that this year heirs who sell newly inherited assets may face a substantial taxable gain.

 Click here for the full article.

 Contact Cynthia for your personal appointment.


 

                                     [ Home ] [ Camarillo ] [ Newbury Park ] [ Simi Valley ] [ Tarzana ] [ Thousand Oaks ] [ Westlake Village ] [ FOR SALE ]

                                                [Interested in 1031? ] [ For Owners ] [ For Tenants ] [ Links & Forms ] [ Project History ] [ News Stand ]

                                                              U.S. Federal Reserve National Bureau of Economic Research Congressional Budget Office

Send mail to Info@Lloyd-Westcord.com with questions or comments about this web site.
Copyright © 2006 Lloyd Wertheimer
Last modified: 03/01/10

Web Site Designed by DWP Information Architects