With the possible passage of Proposition 15, would a Sale-Leaseback be good way to avoid paying a large property tax increase? With 1031 exchanges also possibly going away are Opportunity Zones the answer?
A new survey released points potential trouble for Proposition 15. An opinion survey by Probolosky Research shows 48.8% plan to vote against it, 41% for it and 10.3% are undecided.
Although this is goods news, there is still a lot of time between now and election day and a lot can change. Couple with that, Biden’s overtures that he might eliminate the tax deferred 1031 exchange, Commercial Real Estate Property owners still have a lot at stake this election.
One option to Commercial Property, Industrial and Warehouse owners who occupy their building is a sale-leaseback. A sale-leaseback not only allows the owner to enjoy an infusion of cash, but rental payments under the lease are usually fully tax deductible.
Aside from a 1031 exchange, another option to Commercial and Industrial Real Estate owners is deferring a capital gain to an opportunity zone fund. To learn more, see this post: Opportunity Zones: A Commercial Real Estate Capital Gains Tax Savings Instrument
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