Author Topic: Trading Stock for Real Estate  (Read 724 times)

Engineer_Erik

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Trading Stock for Real Estate
« on: August 06, 2017, 10:31:03 AM »
My wife and I are looking at buying a small commercial property in town.  It's a 4 unit strip mall, with my wife's business occupying one of the units.  We would have to finance, and I've had a brief discussion with the bank to get ballpark numbers. We'd probably have to come up with ~350k down payment.  The owner did mention off hand he might be open to receiving some stock from me instead of cash.  I was wondering if there was any advantage to this?  My gut says no, but I'm hoping there's some loophole out there ;)

I have both stock options and stock that I hold from the company I work for.
If exercised and sold the stock options, they would be taxed at short term gains ~45% (39.6 federal & 9.3 California)
If I sold the shares I own outright, they would be taxed at long term gains ~28% (20 federal, & 9.3 California)

Any way to just transfer these shares as part of a real estate sale and not have to realize gains? 
Any other tax tricks out there that might help me?

Thanks for any input!

SeattleCPA

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Re: Trading Stock for Real Estate
« Reply #1 on: August 07, 2017, 01:44:41 PM »

Any way to just transfer these shares as part of a real estate sale and not have to realize gains? 

You can't do a 1031 exchange if that's what you're asking...

BTW, the one thing you might, might, be able to do is use cost segregation to really, massively, jack the depreciation... and then assuming you could get the depreciation deduction onto your tax return, use that depreciation to shelter the income from the stock options. (This might require a couple of years of fiddling.)

This blog post explains how this gambit works in theory...

http://evergreensmallbusiness.com/real-estate-vs-ira-and-401k-accounts-part-i/
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Engineer_Erik

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Re: Trading Stock for Real Estate
« Reply #2 on: August 26, 2017, 11:05:46 AM »

Any way to just transfer these shares as part of a real estate sale and not have to realize gains? 

You can't do a 1031 exchange if that's what you're asking...

BTW, the one thing you might, might, be able to do is use cost segregation to really, massively, jack the depreciation... and then assuming you could get the depreciation deduction onto your tax return, use that depreciation to shelter the income from the stock options. (This might require a couple of years of fiddling.)

This blog post explains how this gambit works in theory...

http://evergreensmallbusiness.com/real-estate-vs-ira-and-401k-accounts-part-i/

Yah, my original question was along the lines of a 1031 exchange which I was pretty confident was a no-go.   I have never heard of cost segregation.  This may work for us in our situation and I'm going to investigate getting a survey done if we do purchase the property.  Thanks for the suggestion!