Ready to get multiple referrals from clients?
It’s so easy to recommend your investors add the 1031 to their sale – usually saving tens of thousands in state and federal taxes which frees up more money for the next purchase. Your client needs to know that you are feeling their tax pain too. Of course this added service makes you the Broker more valuable, and you don’t have to be an “expert” in the 1031 process – just refer your client to a service-oriented Facilitator who is free to answer your concerns on the fly. We will show you how easy the math is to calculate the tax savings.
The math is easy:
The gain that the IRS and State want to get their taxes on is:
Sales price minus closing costs minus the original purchase price PLUS all those years depreciation times federal capital gain and medicare tax rates of 20% and 4% and state tax rate of about 10%:
For a $1,000,000 sales price and an original purchase price of $600,000 held for 10 years:
Taxes equal: $1,000,000 minus $80,000 (closing) minus $600,000 plus $154,000 (depr) times 34% in taxes = $161,000
This means your client would have and extra $161,000 to invest into the new property that you will find for them, and only pay our office $1200. The full $920,000 at closing, instead of only $759,000.
It’s truly that simple. The 1031 process is still by far the best route for investors to take to save the most tax and keep the freedom to control their property, and follow you, their Broker’s, recommendations going forward