Support for the Property-owner Tired from Landlord Headaches

 

Owners of rental property...

• will always do well with their investments by adhering to the principle of keeping their expenses below the level of their income. This process is sometimes enhanced when the owner is able to handle the majority of his own upkeep expenses. At the same time, he is still able to depreciate the basis of his property while the value of the property is, in all likelihood, appreciating.

• ´On the other hand, once the property has been fully depreciated, a major financial benefit for keeping this property is gone. Unfortunately, this often seems to take place at a time when the owner, having undergone his own aging process, has grown weary if not less and less capable of personally handling his property upkeep. To put it succinctly, there comes a time when property management, along with property ownership, becomes more of a headache. Nevertheless, what can one do? To sell it means a wipe out by capital gains taxes and to exchange it merely continues the headache. Is there any other option?

• YES, there is. Using the charity of your choice as a tax sheltering vehicle, a complete bypass of capital gains tax can be obtained upon the liquidation of your property, and then provide you with a lifetime of what usually turns out to be increased income. With portions of the increased earnings, provisions can be made to pass the asset value to your heirs estate tax and gift tax free. Then upon your passing, what remains passes on to your charity of choice.

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How a Capital Gains Bypass Performed for the Andrews

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• Andy and Angie Andrews: both age 74

• Life expectancy: 21.1 years

• Value of Rental Property: $500,000

• Property Basis:  $150,000