A sobering article in today’s Forbes, explaining how
higher taxes are certain no matter who
wins the election
, makes several important, time-sensitive points that could affect every real estate investor’s bottom line and ALL investors should heed:
  • For those who want to sell investment property at the 15% long-term capital gains rate, now might be a good time. There may never be another chance.
  • Long-term capital gain rates will jump from 15% to 23.8% after 12/31/12.  That’s the highest rate since 1997.  That means you’ll put $83,800 less in your pocket for every $1,000,000 of your sale price.
  • That 8.8% increase is made up of two components: (1) after 12/31, the best rate on long-term gains goes from the current 15% to 20%, and (2) capital gains will incur an additional 3.8% Medicare tax starting 1/1/13.
  • Even if Romney gets elected, his promise to repeal the 3.8% surtax, along with the rest of Obamacare, may be difficult to push through Congress.
Consult your tax advisor to get more details and determine how the above may affect your personal situation.  However, one thing is crystal clear: if you’re an investor thinking about selling investment property within the next year (or if you’re analyzing a potential new investment purchase now that you plan to sell after December 31, 2012), you should immediately review your plans in light of the above taxes.  These higher taxes could make a huge difference to your net profit and, considering how long it takes to market your property, find a buyer, enter into contract and close your sale, you should start the process IMMEDIATELY if you want to close before December 31, 2012.
We can help.  We focus our practice on helping investors like you with their transactions, asset protection, litigation and estate planning.
Please e-mail me at [email protected] if you would like to discuss this blog post or any other legal matter.

Join The Encore Presentation of our Complimentary Webinar!

Coronavirus Alert: Best Practices for Commercial Lease Challenges from the Landlord and Tenant Perspective


When: Friday, June 5th @ 12pm PST

Join Lerman Law Partners, LLP real estate litigation and transaction attorneys Jeff Lerman, Phil Diamond and Dan Dersham, Jeffer Mangels Butler and Mitchell LLP bankruptcy attorney Ben Young, and McLaughlin Sanchez LLP eviction and rent control attorney Michael McLaughlin for a free 2 hour webinar Friday, June 5th, at 12:00 noon (if you cannot make it, register and you will receive a recording), when we will be discussing the impact of COVID-19 on commercial leases, evictions and bankruptcy issues, from both the landlord and tenant perspective.

You have Successfully Subscribed!