During our first meeting, Ray & Rhonda told me that they had sold their commercial property and were expecting to pay thousands of dollars of capital gains tax and depreciation recapture. Their CPA didn’t have any ideas that would defer their taxes. Normally, a Section 1031 exchange could be used to defer all taxes on the sale of income property, but the new property has to be identified within 45 days. Ray & Rhonda were on day 43 when I learned of their situation.
Solution: Because we work closely with a number of companies that have a ready inventory of suitable exchange properties, we were able to identify a property the next day and they were able to complete a Section 1031 exchange using a Delaware Statutory Trust to defer all taxes. They can continue to defer those taxes until they pass away. Their heirs will then have the property revalued, known as a "step-up in basis", and that will eliminate all cap gains to the heirs and therefore all cap gains taxes.
Ray & Rhonda saved thousands of dollars in capital gains taxes and they also fired their CPA.