Covering Your Assets: Year-end tax-planning planning primer
by Mike Bosma
Mike Bosma
The end of the year symbolically brings an opportunity to both reflect and look forward. Of course, it also brings the tax year to a close and creates a natural planning opportunity.
Review the following important items to help end 2020 on a strong note and set yourself up for success in 2021.
Tax savings opportunities depend on individual goals
Success has different meanings for different individuals. Depending on your phase of life and personal financial plan, this could be an opportunity for tax savings, for setting money aside for you or your family’s future, or for making a charitable contribution.
The best way to make a plan is to understand your options.
1031 exchange
If you have gains from the sale of income-producing real estate, you may be able to defer the gains and the tax bill through a 1031 exchange. Keep these restrictions in mind:
You have to identify a new property within 45 days of the sale of your property and close on the new property within 180 days from the sale.
You cannot take possession of the proceeds. The funds need to flow through a qualified intermediary and then into the new deal.
If you don’t want to hold and manage a property, it is possible to buy into a new position through a Delaware Statutory Trust, which also may help with the process of identifying replacement properties.
Read the entire article in the NNBW: https://www.nnbw.com/news/covering-your-assets-year-end-tax-planning-planning-primer-voices/