If you own your home (or want to) and/or investment real estate but don’t fully under its tax benefits, “Selling Real Estate Without Paying Taxes, Second Edition” by attorney Richard T. Williamson shows how to maximize your tax advantages. Emphasis is primarily on avoiding taxes when selling real estate, but the author also emphasizes the importance of the noncash depreciation deduction for owners of investment buildings.
This book is for homeowners and investors who need more than basic tax information about avoiding tax on home sales and tax-deferred exchanges. Williamson provides superb explanations of how to use private annuity trusts, charitable remainder trusts, and even tax-free IRA (individual retirement account) investments to accomplish financial goals while avoiding taxes and planning for retirement.
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Investors who are tired of property management but want to continue enjoying the real estate income and tax advantages will be especially interested in the brief chapter explaining how to make a tax-deferred trade into a management-free tenant-in-common (TIC) investment property.
This well-organized book provides simple explanations of sometimes-complicated tax concepts, such as the tax-deferred-exchange rules and the $250,000 and $500,000 sales-exemption rules for primary residences. Without getting technical, the author helps readers understand these important tax-avoidance rules.
Williamson has a knack for simplifying tax concepts, especially installment sales tax deferrals and private annuity trusts so the reader will know if the concept is suitable and if a tax adviser should be consulted. His explanation of private annuity trusts is the best I’ve seen.
It’s hard to get excited about saving tax dollars, but Williamson comes close. By the use of many brief examples, he explains how tax savings can result from wise tax planning. Although the book is not a legal treatise, where necessary the author lists tax court decisions, IRS Revenue Rulings and other key resources real estate owners may need to show to their tax advisers.
When a tax-saving concept has serious disadvantages to consider, the author explains them and, sometimes, how to avoid adverse consequences. For example, when he explains charitable remainder trusts for homeowners and investors who want to donate their real estate to a charity but still enjoy the lifetime benefits, Williamson doesn’t hesitate to mention the irrevocability disadvantage and how to overcome it.
Chapter topics include “What are Your Objectives?” “How to Estimate Your Capital Gains Taxes”; “The Benefits of Depreciation”; “Benefiting from a Stepped-Up Basis”; “Understanding All the Advantages of the Primary Residence Exclusion”; “Investment Property Taxation-Investor Versus Dealer Status”; “Starker 1031 Tax-Deferred Exchanges”; “Tenant-in-Common Exchanges”; “Installment Sales”; “Combining a 1031 Exchange with an Installment Sale”; “Private Annuity Trusts”; “Charitable Remainder Trusts”; and “Tax-Free Real Estate Investing in an IRA.”
This book for homeowners and investors shows how to maximize their tax advantages, primarily when the property is sold. It makes the tax rules easily understandable by nonlawyers and nonaccountants. On my scale of one to 10, this superb book rates a solid 10.
“Selling Real Estate Without Paying Taxes, Second Edition,” by Richard T. Williamson, Esq. (Kaplan Publishing, Chicago), 2007, $21.95, 195 pages; available in stock or by special order at local bookstores, public libraries and www.Amazon.com.
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