Tax Deferred Sales, LLC, otherwise known as TDS, specializes in providing sellers of investment properties with a better way to manage their negative capital tax expense and sales of appreciated assets in the State of California. Our company was founded by Paul A. Conte. Paul is an LLM tax attorney who has been in practice for well over twenty (20) years. He has developed a proprietary Installment Sale transaction for delaying state and federal capital gains taxation in full compliance with the Internal Revenue Code. TDS’ Installment Sale transactions are famous for saving failing 1031 tax deferred exchanges.
As important as a TDS Installment Sale transaction is to saving the day under normal circumstances, it is even more crucial now that we are experiencing an economic shutdown. Under current circumstances that we are all suffering through, 1031 transactions are next to impossible to complete. This is due to the fact that it is incredibly difficult to identify a replacement investment property within the short 45 day timeframe as required under the 1031 tax laws. Real estate investors are often not taking the health risk of visiting potential replacement properties in person right now.
In addition, it is not a smart idea to make such a large and important investment decision based solely on a video tour. Even if you are willing to identify your replacement property by only utilizing a video tour, how are you supposed to close on the sale of that replacement investment property within the 180 day timeframe as required by the IRS? Six (6) months may or may not work out under normal circumstances, but that is a tall task to say the least since we are in the middle of an economic shutdown to complete one’s due diligence and financing process.
The good news is that Tax Deferred Sales Installment Sale transaction does not require you to identify and purchase a replacement investment property. You simply sell your 1031 Qualified Intermediary Exchange Account Balance to a skilled TDS Installment Sale purchaser. When your Installment Sale of your the exchange account balance is complete TDS is legally obligated to pay you back.
A major benefit of an Installment Sale is that you get to choose the intervals and length of your income stream and thereby deciding and controlling your tax deferral and payment obligations. The entire net value of your proceeds of the sale are paid to you in the number of installment pay you decide is right for you instead of in one lump sum, this is the legal mechanism that defers your tax obligation.
This is a great advantage, in that you are only required to pay the capital gains tax as you receive the installment payments. The installments are paid out on a monthly or yearly basis, and you choose how many years the distribution will take place for. So if you decide on a fifteen (15) year installment plan, you are actually delaying the capital gains tax because it is spread out equally over that fifteen (15) year period.
Another advantage or avoiding a lump sum distribution is that in taking payments over a number of years will often actually decrease one’s capital gain tax liability and correspondingly increase one’s net worth! Delaying taxation is often better than paying it currently based on time value of money principals. TDS Installment Sales transactions are brilliant because it not only defers capital gains tax payments; it also provides you with a means to realize liquid assets from the sale of your real estate investment properties. You get to use your current tax liability over a number of years to provide yourself with more net income cash flow which can be engineered with significant safe guards.
If you would like more information on Tax Deferred Sales Installment Sale transactions, and or need help saving a failing 1031 transaction, please contact Tax Deferred Sales, LLC. today. We look forward to hearing from you and helping you build wealth through the guaranteed deferral of capital gains tax.