Joseph Perry, Partner-in-Charge, Tax & Business Services, Quoted in Forbes.com Article "Why You Should Dump Your Stocks and Sell Your Business Now"
By Ashlea Ebeling
What if you did an installment sale in a prior year? You could try to sell the note to a third party, which would cause you to recognize the gain, suggests Joseph Perry, a CPA with Marcum in New York City. Or ask the original buyer to pay off more of the note this year, at a discount.
Rethink 1031 exchanges. A lot of the planning around rate hikes goes against what wealthy folks have been trained to do for years. One Perry client, a real estate investor, was selling a New York City office building for $30 million this year and wanted to do a 1031 exchange—just as he’d done before. In this exchange, you roll all the capital gains from the property you’re selling into a new building, which takes on the old property’s low basis.
Perry counseled against a 1031. Why? After all, gains up to the amount real estate has been depreciated are taxed at 25%, not 15%, and the 25% rate won’t change when the Bush tax cuts expire. But the 62-year-old client is planning to sell all his holdings and retire within five years anyway, and avoiding that 3.8% Medicare surtax will save him $1.1 million on a $30 million gain, Perry figures.