Problem
The owner of two office buildings with a combined value of $14.9 million wanted to sell but faced a major problem. After costs of sale and paying the $12 million mortgage debt owed, he would not have enough to pay at close of escrow all the total taxes due, totaling $4.5 million. Consequently, he would be forced to pull out of pocket more than $2.0 million to pay off the balance owed to the IRS and state. Included in this problem was the Debt Over Basis tax issue that alone triggered $2.0 million of the total amount of taxes owed.
WRCRES Tax Alliance Solution
The two buildings are sold for $14.9 million, sale costs are paid, the $12 million mortgage debt is paid off without triggering the taxes due for Debt Over Basis. In addition, the seller receives at close of escrow more than $1.5 million to reinvest however he chooses.
What’s Next?
If you are thinking about selling your highly appreciated asset, Contact Us! Consultations are free of charge and take place at your convenience. We can also provide conference call consultations with your current advisors or other financial experts you trust to ensure that we are the right choice for you.