Case Study

Challenge: To integrate essential thinking in two related financial areas for the benefit of our client. Our client’s objective was to re-position their assets in a tax-smart way to provide increased cash flow that would enable them to put their two sons through college. The client was also currently in the process of dealing with numerous headaches related to the management of their rental property. Additionally, they had concern about selling the highly appreciated property and incurring a significant tax consequence.

Process: Based on a sophisticated analysis utilizing our planning process and state-of-the-art software tools, InConcert Financial Group advised the client that by utilizing IRS Code §1031* combined with a Tenant-In-Common (TIC) real estate investment structure, they would be potentially able to create potential cash flow from the equity tied up in their real estate and defer capital gains taxation. Confirmation that they were an accredited investor was the first step in the process. Once the accreditation was confirmed we were then able to move on to determining risk tolerance and cash flow requirements necessary to accomplish the goals. Gathering the necessary information allowed our team the opportunity to work closely with the prospective client to identify the type of property that would have the potential to net the appropriate return for their relative risk tolerance.

Solution: The client didn’t have to pay any taxes on the sale of their rental property because the taxes were deferred under the tax code §1031. In addition, they had significant cash income to help pay for their sons’ college expenses. The bonus was that they no longer had to contend with their prior day-to-day property management headaches. InConcert’s wealth management team was able to efficiently integrate all the requisite financial disciplines to assist the new client in making this a near-effortless transition.

* This material does not constitute an offer to buy or sell any security. Such offers can only be made through a private placement memorandum or prospectus. There are significant risks associated with 1031 Tenant in Common investments. Please consult with your tax or legal professional if considering a 1031 investment.

Securities offered through Berthel Fisher & Company Financial Services, Inc. (BFCFS). Member FINRA/SIPC. Heritage Capital and InConcert Group are independent of BFCFS. This communication is strictly intended for individuals residing in the states of Arizona, California, Colorado, Connecticut, Idaho, Michigan, New Hampshire, Nevada, Texas, Washington and Wyoming.

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