Over the years, Ms. Matos observed that the majority of the real estate investors she interfaced with had three common needs: to get out of managing their investment properties, to diversify their investments, and to upgrade to institutional assets. Often, the sale of their property presented several challenges. The sale would generate large capital gains taxes, depreciation recapture, a high alternative minimum tax tab, and in some cases, state and excise taxes. In many situations, the investors’ tax bills would far exceed 30-35 % of the capital appreciation! Furthermore, years of ownership resulted in paid mortgages and liens that eliminated the investors’ interest and depreciation expense. The end-result was an under-performing asset. |