Estate Planning & Administration
Our client planned to sell several rental properties in Virginia, valued at approximately $1.2 million, and purchase property in Puerto Rico as part of a 1031 exchange. He came to us when he learned that having taken depreciation deductions on the rental properties since purchasing them 30 years ago, he would owe close to $280,000 in taxes. To further complicate matters, the IRS does not consider property in Puerto Rico a like-kind exchange.
After meeting with our client, we informed him that property in the U.S. Virgin Islands and Guam is considered like-kind by virtue of §932 and several related Private Letter Rulings.
This enabled our client to engage in a 1031 exchange, roll the proceeds from the sale of his Virginia properties into a total of seven island properties that met the conditions to generate a positive cash flow, and eventually convert one of the condos into his primary residence upon retirement.
We saved our client approximately $280,000 in taxes and helped him achieve several retirement goals ahead of schedule.← Case Studies