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Sold $980,000

4 bed · 1.75 bath · 2,800 sqF

Pristine mid-century home in Magnolia on coveted West Viewmont Way, just 5 homes from Discovery Park! Gleaming hardwood floors on the main floor. Updated kitchen with Cambria Quartz counters & adjacent dining room, perfect for entertaining. Spacious, bright, finished basement features 2 bedrooms, 2 offices, ¾ bath, lots of storage & spacious laundry room. Dual pane windows, comp roof, gas heat & hot water, 1-car garage. Beautiful setting. Parklike backyard with pathways, bridges & more. 5 Stars!

 

Your real estate solution awaits.

Would you be willing to put off the sale of your home for 2 years in order to be able to reinvest your proceeds and defer taxes on your sale?

Here is an example of a client we are working with right now:

Our client has a highly appreciated home, wants to defer taxes on the sale of their  home and still be able to claim the Section 121 exclusion. 

·  Client paid $198,000 for their Sammamish home in 1989.

·  Client invested $143,500 in improvements over the years and has the receipts: 

New Kitchen, New master bath, new roof, new guest bath, added a fence, 2 decks, created a closet in the attic off the master bedroom, added a patio off the front porch

·  Client’s house value today about $1,650,000.

·  If they sold it, they would likely have to pay capital gains tax of about $135,800 as follows:

Sales Price:              $ 1,650,000

Cost of Sale:             $   132,000

Purchase Price:        $   198,000

Improvements:          $   143,500

Gain on Sale             $1,176,500

Section 121 Excl       $    500,000 (married filing jointly)

Taxable Gain            $    676,500

Cap Gains Rate:                  20%

Tax on Sale:             $    135,300

Last year they bought a home in Florida for $579,000 that they hope to retire to someday, but for now, are renting the home to cover the costs.

When they decide to retire, they plan to:

 1.  Move into their Florida rental house and make it their new primary residence.

2.  Convert their Sammamish house into a rental property for at least 2 tax seasons.

3.   After 2 years of rental, but before 3 years of rental, sell the Sammamish house using a Section 1031 exchange.

4.  Claim the Section 121 exemption on the sale of the Sammamish house and use that $500k to pay off their loan on the Florida house.

5.  Use the 1031 exchange on their sale to roll the remaining proceeds into a Delaware Statutory Trust so it would continue as investment property for them.

 After all that, they hope to end up with:

·  A Florida home free and clear of all debts;

·  About a $919,000 investment in a DST (currently yielding about 5% cash on cash).

Look at the attached chart below to see an example they used to make their decision. It’s a side-by-side comparison for them showing the difference between Selling now and paying the taxes vs converting to an investment property and then exchanging into a DST in about 2 years.

Example of Sammamish client transition to DST.