Simplify your life
The tenant takes care of everything.
Defer your gain recognition
You may be able to complete a trade with less equity than your capital gain tax would have been.
Build a bridge over troubled waters
The US lost 8 million jobs in this recession. Rents are down and vacancy rates have soared. Over a trillion dollars of bad loans are coming to the market in the next few years. Hundreds of banks are projected to disappear. Ride out the storm by using net lease property to store value and recurring cash flow.
Diversify from real estate to bonds on a tax-deferred basis
Effectively replace real estate exposure with a corporate bond. Low leverage property leased to highly rated credit tenants offer the opportunity to 1031 exchange higher risk real estate into a long term bond equivalent security. This can be powerful personal financial and tax planning if used appropriately. This type of bond equivalent property also can allow for enhanced liquidity with improved access to the credit markets to raise cash levels.
Defer foreclosure gain recognition
The IRS considers a non-recourse foreclosure to be a sale. If your loan balance is more than your tax basis, you have capital gain and potential tax to pay out of pocket. Defer the tax by using the tax dollars to purchase net lease assets to maintain your before tax net worth.
Build equity
The tenant can pay off your debt, securely year by year.
CIRCULAR 230 DISCLOSURE: This communication is not a tax opinion. Pursuantto Internal Revenue Service regulations, to the extent that this contains
tax advice, it is not intended or written to be used by a taxpayer for thepurpose of avoiding tax penalties that may be imposed on the taxpayer or forpromoting to another party any tax related matter addressed herein.