DISCLAIMER: THE INFORMATION IN THIS REPORT IS NOT TO BE CONSIDERED LEGAL AND/OR TAX ADVICE. NEITHER SELLTAXFREE.COM OR 1031 EXCHANGE ADVANTAGE ® PROVIDES LEGAL OR ACCOUNTING SERVICES. THE SOLE PURPOSE OF THIS REPORT IS TO ALERT YOU, THE PROPERTY OWNER, OF AN ESTIMATE OF YOUR POTENTIAL TAX-LIABILITY UPON THE DISPOSITION OF YOUR PROPERTY, AND HOW IT MAY BE TREATED WITH IRC SEC. 1031. IT IS ADVISABLE THAT ALL DETAILS BE REVIEWED AND CONFIRMED WITH YOUR LEGAL AND/OR TAX PROFESSIONAL(S).
INTRODUCTION
Hi, I’m David Greenberger. I went to law school a long time for two reasons: I wanted to help people, and my mother told me to. But it wasn’t until 25 years later, the day I stopped practicing law, that I was able to start making an impact on people’s financial lives by showing them how to sell highly appreciated real estate tax-free. This positively impacted many people’s lives and began a journey to tell as many people as I could.
At SellTaxFree.comTM we take your money and your future seriously. We spend time walking you through the rules & helping you make a plan that works for you. Please take a look at your Personalized Tax Report and let us help you change your financial future for the better.
SellTaxFree.comTM is a division of 1031 Exchange Advantage ®, an IRC 1031 Exchange Accommodator based in San Diego, California. The company is owned and operated by David P. Greenberger, Esq. and is the nation’s only tech-enabled 1031 Exchange Accommodator, supplying Accommodation services on Standard-, Reverse-, and Improvement-Exchanges to investors nationwide for over 30 years.
Our estimate is based on the information you provided:
Based on that information, we estimated the following:
Wondering how we calculated these numbers? See your tax-breakdown on the next page, and profit-breakdown on Page 9.
How is Your Profit Taxed?
Based on your $611,636 in profit, we've estimated that your tax bill could be as high as $186,009! Take a look at the breakdown below to see how we got there.
$644,000
Sales Price (-) Tax Basis* = Profit
Profit
FEDERAL TAXES
- Federal Capital Gains Tax: $90,00
- Federal Net Inv. Inc. Tax: $13,300
- Federal Depreciation Recapture Tax: $2,909
STATE TAXES (CA):
- State (CA) Capital Gains Tax: $79,800
TOTAL TAXES (Estimated) $186,009
*To see a full breakdown of how we estimated your Tax Basis, please see Page 9.
Joyce, the Profit in Your Property is No Different Than Money in Your Bank Account
Paying $186,009 in unnecessary taxes is the same as giving away $186,009 from your bank account! Think about what you could buy with $186,009.
- Joyce's Profit
- Joyce's Money
To paraphrase Benjamin Franklin:
$186,009 saved...
is $186,009 earned!
How Your Tax-Bill Impacts Your Future Investment Decisions
After paying off your mortgage, and then paying $186,009 in taxes, you will only have $53,991 left. With less money to put in the bank, or reinvest, you will receive less annual income from your next investment.
- 1 Pay $186,009 in taxes
- 2 Place remaining $53,991 in the bank
- 3 Earn $5,339 over next 5 years
- 1 Pay $186,009 in taxes
- 2 Reinvest remaining $53,991 in stocks/bonds
- 3 Earn $13,498 over next 5 years
- 1 Pay $186,009 in taxes
- 2 Reinvest entire $240,000 in equity in real estate
- 3 Earn $72,000 over next 5 years
Luckily, the 
Offers the 1031 Exchange Tax-Break!
The 1031 Exchange allows you to sell your real estate without paying any taxes if you reinvest in real estate. Tired of Tenants, Toilets & Trash? Don't worry, professional management is available on all investments!
Before Closing on Your Sale
Manage Your Own
Your Own Real Estate
Passive Investments
Professionally-Managed Property
Invest & Use
You Can Use Personally
1031 Exchange Reinvestment Options to Meet All of Your Needs
Any property held for investment qualifies as an allowable 1031 reinvestment. If you want to manage your property, great! If not, there plenty of passive options that are professionally managed for you. You can also improve the property you purchase with tax-free money, or pull cash out tax-free!
Commercial
EXAMPLES INCLUDE:
Apartment Complexes
Office Complexes
Self-Storage Facilities
Warehouses
Raw / Agricultural Land
30+ Yr. Lease Interest
Etc.
Residential
Standalone Homes
Apartments
Condos
Multi-Family Rental
Duplexes
Triplex
Fourplexes
AirBnb
VRBO / HomeAway / Vacasa
Vacation Rental
Other
Vacant Property
Home Office/Workspace
Prop. Involved in Divorce
The 1031 Exchange requires* that you reinvest your equity into a new real estate investment. If you want to manage property - Great! If not, there are many passive options available too!
Re-fi, Improve, etc.
Need Cash?*
Complete your exchange, re-finance, and get cash tax-free.
Improvements?
Pay for improvements with tax-free money in an Improvement Exch.
Buy First!
Buy replacement prop. before you sell, in a Reverse Exch.
*If you don't want to reinvest all of your equity, 'Partial Exchanges' allow you to shelter a portion of your taxes, while taking some equity off of the table at closing.
Ready to Get Started?
This Seller Tax-Report was written to help you better understand your upcoming investment decision, and show you how the 1031 Exchange can save you a lot of money in taxes, enhance your earning power and allow you to make re-investments that provide you a lifestyle to best fit your needs. To talk further about your plans, schedule a free consultation with a 1031 Specialist who can walk you through your options, answer your questions, and help you create the best plan for you. Or, simply set up your documents today!
*We will only charge a documentation fee if you elect to move forward after your sale closes.
FAQS
How did you calculate my tax estimate?
To calculate your tax estimate, we first estimated your profit. Capital gains taxes tax profit at the following rates:
- Federal: 15% of profit if profit is less than $400,000. 20% of profit if profit is greater than $400,000.
- Federal Net Investment Income Tax: 3.8% of profit over $250,000
- Federal Depreciation Recapture: 25% of the depreciated amount
- State (CA): 13.3% of the profit
How can I qualify to pay NO taxes when I sell or get cash out of my property?
As long as the property you're selling has been used for investment purposes, it should qualify for the 1031 exchange, which allows you to sell without paying any taxes. To defer the entire tax payment, 1031 exchange rules require you to (A) set up your exchange before you close on your sale, and (B) reinvest all of the cash equity from your sale into (B) new investment To get cash out tax-free, you can either refinance or get a line of credit on your new property after you've fully completed your 1031 exchange.
property of equal or greater value relative to the sales price, within 180 days of closing on your sale. To get cash out tax-free, you can either refinance or get a line of credit on your new property after you've fully completed your 1031 exchange.
What is the role of SellTaxFree.comTM in a 1031 Exchange?
SellTaxFree.comTM is a division of 1031 Exchange Advantage®, which is known as a '1031 Accommodator,' or 'Qualified Intermediary' (QI). The IRS requires that investors use a QI to set up their exchange paperwork and hold their sales proceeds from the time that the relinquished property is sold until the replacement property is purchased. The QI also provides guidance on the 1031 transaction, and cannot be someone with whom the exchanger has had a former business or family relationship with prior to the transaction (including CPAs, attorneys, etc.)
Can I get legal and/or tax advice from you?
No. The IRS does not permit your attorney, accountant or escrow company to be your qualified intermediary, and vice versa. As your Qualified Intermediary, we can work with your attorney and/or tax advisor to make sure your 1031 transaction goes smoothly.
Can I get money out tax-free when I'm selling?
Yes, you can take money out of the property that you are either selling or buying, tax-free, with a refinance or line of credit. Check with us for details, as the timing and contract dates are critical.
I've already sold my property. Can I still make it tax-free?
As long as your sale has not yet closed, yes! You can make it a tax-free sale right up until the day before your sale closes.
Can I buy or sell more than one piece of property tax free?
Yes, there is no limit to the number of properties you can sell or buy tax-free.
Sooner or later, I will have to pay my taxes, right?
No. You can avoid paying taxes on your real estate profits forever. By simply following the 1031 rules every time you sell and buy an investment property, you will be exempt from paying your taxes until you pass away, at which point your taxes pass away with you! We call it "Swap 'til you drop."
What does it cost to do a 1031 exchange?
We guarantee the lowest fee of any bonded and insured accommodator. More importantly, we make your exchange risk-free by offering free documentation and account setup. We only charge our fee if you are able to purchase a replacement property.
A Standard 1031 Exchange costs $695.
A Reverse 1031 Exchange costs $3,000.
An Improvement 1031 Exchange costs $4,500.
Okay, so how do I get started?
Call us toll-free today at 866-944-1031, or, simply visit SellTaxFree.com and click the "Start Exchange" button in the top right corner of the page. There is no cost or obligation to get your documentation and account set up.
BONUS: How Much Profit Do You Have?*
Take a look at the graphics below to see how we estimate how much profit you have.*
You purchased your property for $100,000. While there are a few things we are not accounting for here*, let's assume this is your "Tax Basis".
Your property was used as a rental for 4 years. Every year your property is used as a rental, your Tax Basis decreases in a process called "Depreciation".
The difference between your Tax Basis, and the price your property could sell for today, is $611,636 - thats your Profit!
PRICE
$700,000
DISCLAIMER: THE INFORMATION IN THIS REPORT IS NOT TO BE CONSIDERED LEGAL AND/OR TAX ADVICE. NEITHER SELLTAXFREE.COM OR 1031 EXCHANGE ADVANTAGE ® PROVIDES LEGAL OR ACCOUNTING SERVICES. THE SOLE PURPOSE OF THIS REPORT IS TO ALERT YOU, THE PROPERTY OWNER, OF AN ESTIMATE OF YOUR POTENTIAL TAX-LIABILITY UPON THE DISPOSITION OF YOUR PROPERTY, AND HOW IT MAY BE TREATED WITH IRC SEC. 1031. IT IS ADVISABLE THAT ALL DETAILS BE REVIEWED AND CONFIRMED WITH YOUR LEGAL AND/OR TAX PROFESSIONAL(S).
