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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: bentway who wrote (28140)3/14/2005 1:33:58 AM
From: Elroy JetsonRead Replies (1) of 306849
 
If your friend stop doing 1031 exchanges when he is ready to pay the tax. While a portion of the tax is the capital appreciation on the property, building owners find a bigger problem with the recapture of excess depreciation.

That's the deceptively seductive part of owning a building. The tax benefits appear to be much better than they ultimately turn out to be as many of those tax deductions must be repaid when the property is sold.

So yes, if your friend's building loses a great deal of value he may not owe taxes on the sale. But the loss will have to be significant.
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