Help me come up with a target number

[Sunset]

Quote:

Originally Posted by pb4uski Just thinking out loud... you'll probably have a load of depreciation recapture when you eventually liquidate you'll pay one way or the other.... you really don't have $1m in real estate equity because of the huge deferred tax liability associated with the asset. I'd consider biting the bullet and getting that money into a truly tax-efficient asset.

+1
This is the trap the landlords (myself) get into, after many years the sale of the asset is all at once with a big tax bill, vs $1,000,000 in stocks that can be sold off over 20 or 40 years, lowering the tax pain.

Besides for OP, being a landlord is a type of work, instead of a collection of ETF's/Funds.

[brucethebroker]

Two step solution the to rental property "problem".
1. Sell and 1031 exchange into a single family home you would like to live in yourself.
2. Rent that home out for the first year or so (see CPA for guidance). Once established as a rental, move into it yourself. As I understand it, you will not owe taxes until you sell it. Your taxes will be based on prior years of depreciation/cap. gains, pro-rated with the years you have used it as a personal residence. Yes, it is kicking the can down the road, but could put off taxes for a very long time. Run the whole idea past the CPA. Mine told me it would work, and we are exploring the option.

[pb4uski]

Interesting idea, but I doubt that the OP interested in spending $1m on her personal residence since she is currently living in a nice remodeled mobile home.

If she were to go this route, perhaps she could get a multi-unit in a locale that she likes, convert it to condos, live in one and sell the others one-by-one to spread out the tax bite.