Tag: Andrew Lesko

South Lakewood Condo Just Listed by Andrew Lesko

Rarely do these condos come on the market! This 2-bedroom 1-1/4-bath, 1,015- sq.-ft. condo at 10930 W. Florida Ave #618 is located in West Lochwood. It was just listed for $228,000. The Lochwood Landings condo community is surrounded by 5 lakes, including  Kendrick Lake Park & Cottonwood Park and numerous nearby hiking and biking trails. Walk to King Soopers, Starbucks, and many shops and restaurants. This condo is move-in ready, featuring fresh paint and newly installed carpet & flooring throughout. This is a desirable, second level, end unit with a southeast facing, covered balcony. It includes one reserved parking space and ample visitor parking. The most recent sales in the complex have been at or above $250K, making this an exceptional opportunity for a first-time buyer. You can view a narrated video walk-through at www.LakewoodCondo.info. For a private showing, call your agent or Andrew Lesko at 720-710-1000.  Open Sunday, August 25th, 11-3.

Affordable 2-BR Lakewood Condo Just Listed by Andrew Lesko

Check out this sunny garden level condo at 381 S. Ames Street, Unit B-105, just one mile east of the Belmar shopping district with easy access to downtown Denver. It was just listed this week for only $198,000. This recently updated condo comes with stacked washer/dryer, newer cabinets, granite countertops, and top of the line berber carpeting & ceramic tile floors. It’s affordable Lakewood living for the first-time or downsizing home buyer. This end unit comes with 2 reserved parking spaces and low HOA dues ($157/month) which include heat & hot water, a clubhouse and swimming pool! At this time, this is the only 2-BR, 2-bath condo under $200,000 in Lakewood. Find interior photos at www.LakewoodCondo.info. Andrew will hold it open Saturday, 11am – 3pm. Click on the narrated video tour below.

You Can Defer Capital Gains Tax on the Sale of Investment Properties — Or Reduce It

Colorado owners of investment real estate have built up a lot of equity over the last several years through appreciation. Selling those properties outright would subject the seller to significant capital gains tax, but there are several strategies for deferring — and in one strategy reducing — that capital gains tax liability.

Many property owners have inquired about selling their investment property in a way that locks in their gains — including owners who are looking to exit the landlord business altogether. 

Whether your rental property is a single-family home, a duplex, other multi-family dwelling, or a commercial property, you may well be looking to cash out while values are high, but how do you do so while minimizing your tax exposure?  There are several strategies for doing so, but one that was created by the Tax Cuts and Jobs Act of December 2017 is particularly attractive, both for its flexibility and the fact that it allows for reduction of the deferred capital gains tax and elimination of future tax.

There are four exit strategies that simply defer capital gains tax obligations. They include the traditional Installment Sale, the Monetized Installment Sale, the Deferred Sales Trust and the Delaware Statutory Trust. By using one of these exit strategies, you can defer the amount of tax you pay on the sale of a rental property, putting your pre-tax capital to work elsewhere. A fifth tool, the Opportunity Trust Fund, created by the Trump tax bill, is likely to become every investor’s favorite. Let me explain why.

The Trump tax bill allowed states to identify “Opportunity Zones,” and Colorado identified 126 such zones, 40% of which are in the Front Range, including Denver and Jefferson County. Altogether there are now 8,700 Opportunity Zones in all 50 states, the District of Columbia, and in five U.S. territories.

If a new investment in an Opportunity Zone property — or in an Opportunity Zone Fund which invests in such properties for you — is held for 10 years, you pay no capital gains tax when you sell.

There’s a further advantage when you roll the capital gain on your current investment property into an Opportunity Zone investment, because you can sell your current property, take out your basis on that property tax-free, while rolling only your gain into an Opportunity Zone Fund. Your basis on the rolled-over gain is increased (and tax liability reduced) by 15% after 7 years, and your gain on the new investment is tax-free if you hold it for 10 years. I’m told that these tax benefits decline on investments made after 2019.

In this article, I’m only telling you what I understand from reading up on the subject, including at https://www.irs.gov/newsroom/opportunity-zones-frequently-asked-questionso. You’ll want to speak to your tax advisor before making any changes in your real estate investment portfolio.

I thank broker associate Andrew Lesko, who specializes in duplex and multi-family properties, for bringing this and the other tax-saving strategies to my attention. If you’re thinking about selling your duplex, triplex, townhome or condo, contact Andrew for a current market analysis at 720-710-1000 or visit www.DuplexAlerts.com, where you’ll find more details about all five tax deferral/reduction/elimination strategies.

If you have a commercial property to sell, call me at 303-525-1851 so I can refer you to a trusted commercial broker.

Ways to Defer Capital Gains Tax Exposure When Selling Investment Properties

With the new year upon us, many of us are thinking about taxes. While it’s too late to strategize for 2018, let’s look at tax strategies going forward.

Owners of duplex, triplex and small multi-unit properties sell their properties for many reasons. Sometimes an owner wants to leverage equity into another property with better upside potential or a higher return on their investment or into multiple income producing properties.

Perhaps a duplex property was inherited but the responsibility of being a landlord has become overly burdensome. Whatever the situation, there are times when selling a multi-unit rental property and transferring the equity into an alternative “hands-off” type of investment makes sense. You can defer your capital gains tax obligations and keep your pre-tax capital growing for you by utilizing one of these IRS-approved options.

1031 Real Estate Exchange: The 1031 real estate exchange is a tax-deferral strategy that applies to investors who have sold or are about to sell investment real estate. This strategy allows a client to defer capital gains tax on all sales proceeds that are reinvested into other investment real estate properties, as long as the seller:

1) does not take “constructive receipt” of the funds within the exchange transaction.  This means that the proceeds must go directly to a “qualified intermediary” and not at any point be in the seller’s own bank account.

2) meets all requirements outlined in the Internal Revenue Code.

721 Exchange: Less well-known than the 1031 exchange, the 721 exchange is another tax-deferral strategy which applies to investors who have sold or are about to sell investment real estate. This strategy is similar to the 1031 exchange but allows an investor to exchange his property for an interest in a diversified real estate portfolio known as a Real Estate Investment Trust (REIT). As with the 1031 exchange, the seller must not take constructive receipt of the sales proceeds within the transaction.

Delaware Statutory Trust is offered as replacement property for those seeking to defer capital gains taxes via a 1031 exchange. The DST allows for fractional interest ownership in various managed commercial properties with other investors, as individual owners within a Trust. Each owner receives a share of the cash flow income, tax benefits, and appreciation of an entire property. There is potential for annual appreciation and depreciation. Investments begin at $100,000 and allow investors to diversify into several properties.

Deferred Sales Trust is a tax-deferral strategy that applies to many different capital gains situations. These include the sale of a business, real estate, stocks, or bonds, as well as the maturity of principal on a note or carry-back, and even applies in certain debt forgiveness situations. The Deferred Sales Trust is different from the 1031 and 721 exchanges in that it does not require any reinvestment of the sales proceeds into real estate. It is similar to 1031 and 721 exchanges insofar as an investor cannot take constructive receipt of the funds within the transaction.

For expanded, detailed information on each of these tax strategies, visit www.DuplexAlerts.com and click on the  “Sellers” tab in the main menu.

Always consult with your tax or wealth management professional when considering the sale or purchase of an investment property.

A quick caveat:  Neither I nor any agent at Golden Real Estate is a CPA or tax advisor.  Broker associate Andrew Lesko did the research for this article.  Email Andrew at Andrew@GoldenRealEstate.com or 720-710-1000 with your questions or comments.