Are you concerned about the implications of the capital gains tax in 2022? Let’s take a look at the pros and cons of selling your property before the end of the year and why a 1031 exchange might be a good option.
We’ve been speaking with a lot of landowners that are really concerned about the implications of the capital gains tax increasing in 2022. Therefore, they’re really considering selling their property before year end. Of course, there are a lot of pros and cons that come with this right now.
It is an extremely hot sellers market and Austin is the darling child of the commercial real estate industry, so it could be a good time to sell. However, a few things to keep in mind, if you are requiring a buyer to close quicker than they normally would, generally speaking, they’re going to include a discount in that for the expediency of the sale. This isn’t always going to yield the best outcome, because if you are being expedient in a real estate transaction, guaranteed a buyer is going to require a discount for that.
If you plan on purchasing another piece of property with the proceeds, why wouldn’t you just do a 1031 exchange which will help you to defer your taxes? We’ll discuss this more in a future video, but we would recommend if you’re planning on purchasing another property why hurry the sale by year end? Why not take your time and then you can defer the taxes with the purchase of another property and the capital gains tax won’t come into play?
Lastly, the market is very frothy right now. So, we always recommend that you be very prudent and diligent with your real estate investments. Whether you’re purchasing or selling, of course, we always recommend that you consult with an attorney, a CPA or a financial analyst as well.
Feel free to reach out to us with questions or other topics you’d like to see covered.
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