Will Your Children Thank You?
Posted in Real Estate Tax on January 27th, 2010 by admin – Be the first to commentLong-term, passive real estate investments are typically sought out by those looking to plan for their heirs. Normally, the principal owner is a sophisticated real estate investor who wants to simplify asset holdings for the future.
Moreover, beneficiaries may be better served by owning an asset that provides a steady income stream along with the benefits of owning real estate. But estate planning can be complicated, and the transfer of assets to an estate must be handled by a qualified professional who is familiar with state and federal tax laws.
“Those looking for safer assets for their beneficiaries should be cognizant of various factors,” says Benjamin Hanan, shareholder at Sarasota law firm Abel Band Chartered. “Using net leased investments as an estate planning tool can be highly beneficial to both the investor and their beneficiaries. ”
Should a particular investor purchase and maintain their net leased investment until death, the investor’s estate will receive a step-up in basis to its fair market value as of the date of the investor’s death, thereby eliminating all of the deferred income tax on that investment. Thereafter, the investor’s beneficiaries receive the following benefits: a real estate investment; an income stream; and an asset in which they possess a relatively high basis such that if they sell the asset in the future, they can minimize the taxes paid in connection with a read more