Wealth Opportunities in Commercial Real Estate: Management, Financing, and Marketing of Investment Properties

Planning

There are five types of taxes that we, as real estate investors, must attempt to minimize: the real property tax, the estate or inheritance tax, the gift tax, the income tax, and the capital gains tax. It is important to be aware, in general, of the rules relating to when these taxes occur, of the percentage of tax applicable when they do occur, and of methods to avoid or at least minimize these various taxes.

It is not my intention in this chapter to make you an estate planning expert, but rather to sensitize you to the importance of this area and to, in general terms, set forth the steps that could be taken to minimize your ultimate tax bite. Of course, the steps you take should be tailored to fit your particular situation and, of course, you should consult with your estate-planning attorney and/or your CPA. However, in this chapter, I outline an overview with a general step-by-step checklist covering procedures you might consider in order to lower your tax bite and preserve your assets.

Secure Proper Representation

Your first and most important step should be to secure proper representation. Hire an attorney who specializes in estate planning. This is a specialized field. The money you spend in this area will come back many times over. Do not try to save on second-rate representation. This is not the place to scrimp. Obtain referrals from your CPA, insurance agent, and/or your general counsel. Interview the estate-planning attorney, ask for references, and determine ...