How Do You Diminish Taxable Capital Gains With A Structured Sale?
• Use a Qualified Intermediary (A Title or Escrow Company). This will ensure that all the legal requirements are being followed and that all tax requirements are being met. • Ask for a percentage of the sale price in the form of a down payment. This down payment is usually 10-20% percent of the purchase price. The remaining costs are carried by the seller, at loan terms agreeable to both the seller and the buyer. • For example, assume you have a property that you own free and clear. The property has a value of $500,000. Your goal is to not be taxed up front on income from the sale of the property, but to spread the income out over time. You may sell the property for $500,000 taking $50,000 as a down payment and carrying the remainder as a loan at whatever the current interest rates are. For example, the loan terms may be the remaining $450,000 dollars at 6.5% interest, amortized for 30 years with a 10-year balloon payment. • Know what will be taxed. In this example, the investor would
