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Subject Expert
1031 or cost segregation on the next property. You’re right that it only defers it, but if you kick the can down the road long enough, you never have to pay.
Yes the idea is to die and let kids get stepped up base.
Mentor
Keep kicking the can and ultimately when you die your kids will get stepped up basis and no one ever pays tax
Additional background: We have no kids or any heirs to leave it to. I also don't want to continue to have the burden of managing these properties.
Hire property management firm?
Why would you ever sell a rental property
You’re overthinking it. Just raise the rent to whatever would make you want to keep it, lol
Mentor
Bad take is bad
We sold a rental at the height of the market with over $1M capital gains. It was a pain to maintain, older property, very high and increasing HOA, rent was slow to rise, had a long term tenant about to move out and were looking at some very expensive repairs, we moved out of the area already so it was harder to manage, and we wanted some cash to buy a bigger primary residence. At the time we explored 1031 (near impossible to find anything reasonable to buy at the time) and qualified opportunity funds to defer liability, but ultimately just paid the tax. We were not going to move the family back to make it a primary.
Keep upgrading to larger properties. Defer till you die.
I know a few people now that are taking the appreciation by selling and just paying the tax. Many small mom and pop landlords with a few units don’t want to deal with property management anymore and it’s too difficult to 1031 since everything is overpriced. Plus macroeconomic national trends are skewing towards less landlord friendly environment. Just my take on it.