Tax savings beyond property exchanges

If you own your home (or want to) and/or investment realestate but don’t fully under its tax benefits, “Selling Real EstateWithout Paying Taxes, Second Edition” by attorney Richard T. Williamsonshows how to maximize your tax advantages. Emphasis is primarily on avoiding taxeswhen selling real estate, but the author also emphasizes the importance of thenoncash depreciation deduction for owners of investment buildings.

This book is for homeowners and investors who need more thanbasic tax information about avoiding tax on home sales and tax-deferredexchanges. Williamson provides superb explanations of how to use privateannuity trusts, charitable remainder trusts, and even tax-free IRA (individualretirement account) investments to accomplish financial goals while avoidingtaxes and planning for retirement.

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Investors who are tired of property management but want tocontinue enjoying the real estate income and tax advantages will be especiallyinterested in the brief chapter explaining how to make a tax-deferred tradeinto a management-free tenant-in-common (TIC) investment property.

This well-organized book provides simple explanations ofsometimes-complicated tax concepts, such as the tax-deferred-exchange rules andthe $250,000 and $500,000 sales-exemption rules for primary residences. Withoutgetting technical, the author helps readers understand these importanttax-avoidance rules.

Williamson has a knack for simplifying tax concepts,especially installment sales tax deferrals and private annuity trusts so thereader will know if the concept is suitable and if a tax adviser should beconsulted. His explanation of private annuity trusts is the best I’ve seen.

It’s hard to get excited about saving tax dollars, butWilliamson comes close. By the use of many brief examples, he explains how taxsavings can result from wise tax planning. Although the book is not a legaltreatise, where necessary the author lists tax court decisions, IRS RevenueRulings and other key resources real estate owners may need to show to theirtax advisers.

When a tax-saving concept has serious disadvantages toconsider, the author explains them and, sometimes, how to avoid adverseconsequences. For example, when he explains charitable remainder trusts forhomeowners and investors who want to donate their real estate to a charity butstill enjoy the lifetime benefits, Williamson doesn’t hesitate to mention theirrevocability disadvantage and how to overcome it.

Chapter topics include “What are Your Objectives?””How to Estimate Your Capital Gains Taxes”; “The Benefits ofDepreciation”; “Benefiting from a Stepped-Up Basis”;”Understanding All the Advantages of the Primary ResidenceExclusion”; “Investment Property Taxation-Investor Versus DealerStatus”; “Starker 1031 Tax-Deferred Exchanges”;”Tenant-in-Common Exchanges”; “Installment Sales”;”Combining a 1031 Exchange with an Installment Sale”; “PrivateAnnuity Trusts”; “Charitable Remainder Trusts”; and”Tax-Free Real Estate Investing in an IRA.”

This book for homeowners and investors shows how to maximizetheir tax advantages, primarily when the property is sold. It makes the taxrules easily understandable by nonlawyers and nonaccountants. On my scale ofone to 10, this superb book rates a solid 10.

“Selling Real Estate Without Paying Taxes, SecondEdition,” by Richard T. Williamson, Esq. (Kaplan Publishing, Chicago),2007, $21.95, 195 pages; available in stock or by special order at localbookstores, public libraries and

(For more information on Bob Bruss publications, visit his
Real Estate Center

Copyright 2007 Inman News

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