Tax Considerations When Selling Washington DC Investment Property

Northern Virginia Realty - Gene Mock

As one of the world’s most desired investment real estate markets, Washington DC offers buyers historic curb appeal not found elsewhere, but what happens when it’s time to capitalize on your investment? No buyer purchases investment property with the intention of losing money, but one false tax move and that scenario could become reality. An in-depth understanding of real estate tax implications will serve any seller entering the investment real estate market well.

CONSIDER YOUR OVERALL TAX LIABILITY

Washington DC investment property buyers and sellers can often get tunnel vision when closing a deal. They forget to consider how a specific transaction will fit into the bigger financial picture of their household or business. Capital losses and capital gains are reported on IRS Schedule D and, so long as you held your investment property for more than 365 days, any gain or loss will be treated as long-term. Per IRS regulations, taxpayers can offset long-term capital gains with long-term capital losses, real estate or other, when realized within the same tax year.

Will you be exercising executive benefits upon retirement? Buying or selling investment property may be able to lessen the tax burden created by highly appreciated stocks and options. Call your CPA or seasoned investment real estate professional for more guidance.

COULD A 1031 EXCHANGE BE ON YOUR HORIZON?

If your Washington DC rental real estate has appreciated and you would like to avoid realizing large capital gains, exchanging your current capital asset for a new capital asset may make sense. While 1031 exchanges are sophisticated transactions and should be carefully structured by seasoned tax and real estate professionals, purchasing a replacement property with the proceeds of a current sale, can be a robust basis recapture strategy.

Sometimes even the most seasoned real estate investor finds him or herself in the middle of a bad investment. Vacancies, bad tenants, and the overall Washington DC real estate market can impact the outcome of a deal. By turning your investment real estate transaction into a strategic financial tool, you may avoid losing money to your buyer and the IRS. Before disposing of a capital asset it is crucial to discuss all available options with a seasoned investment real estate professional, Certified Public Accountant, and/or attorney.

For all your real estate investments, contact Gene Mock, Associate Broker, Premier Team, Keller Williams Realty 703-342-8100. He offers expert real estate advice on your investment real estate interests.

Northern Virginia Realty - Gene Mock

Gene Mock – Premier Team – Keller Williams Realty – 703-342-8100

TAX CONSIDERATIONS WHEN SELLING WASHINGTON DC INVESTMENT PROPERTY

 

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US Life Insurance Giant John Hancock Acquires 1750 Pennsylvania Avenue NW, Washington DC

John Hancock Acquires 1750 Pennsylvania Avenue NW, Washington, DC (PRNewsFoto/Manulife Financial Corporation)

Photo Courtesy of PRNewsFoto/Manulike Financial Corporation

After three months of actively seeking a buyer for its prime piece of commercial real estate, Vornado Realty Trust met its match. Vornado spent the last several years aggressively targeting new, high-quality tenants while toying with the idea of a sale in order to position itself for the best possible listing price. September 10, 2015 marked the closing of a USD$182,000,000 deal between Vornado Realty Trust and Manulife Financial Corporation.

Squarely situated alongside luxury hotels, sophisticated shopping outlets and fine dining, 1750 Pennsylvania Ave NW is a strategic real estate investment to say the least. Just one block northwest of the White House, this impressive 278,916 square foot, thirteen story building holds high investment appreciation potential for Manulife and its US life insurance division, John Hancock.
“OUR ACQUISITION OF 1750 PENNSYLVANIA AVENUE EXPANDS OUR FOOTPRINT IN THE WASHINGTON MARKET TO OVER 1.3 MILLION SF OF OFFICE ASSETS MANAGED ON BEHALF OF BOTH JOHN HANCOCK AND EXTERNAL INVESTORS,” SAID KEVIN ADOLPHE, PRESIDENT & CHIEF EXECUTIVE OFFICER OF MANULIFE REAL ESTATE AND PRESIDENT & CHIEF EXECUTIVE OFFICER OF MANULIFE ASSET MANAGEMENT PRIVATE MARKETS. “IN LINE WITH OUR GROWTH STRATEGY, IN THE PAST FIVE YEARS, WE’VE FURTHER DIVERSIFIED OUR REAL ESTATE PORTFOLIO ACQUIRING OVER US$4.1 BILLION OF COMPLEMENTARY ASSETS ACROSS KEY U.S. MARKETS.”
As many international real estate investors focus on diversified real estate holdings to combat inflation pressures, key United States markets like Los Angeles, New York, Chicago, and Washington

DC increase in appeal. 1750 Pensylvania Avenue NW offers tenants sought-after amenities like:
• LEED Gold certification
• .67 : 1,000 sqft parking ratio
• 23,000 sqft average floor space
• Energy Star Certification
• Close proximity to Blue, Orange, and Red metro lines

Featuring a diversified list of both government and private tenants, this commercial property also boasts 96% occupancy. Current tenants include AOL Inc., US Treasury Dept., United Nations Foundation, and GNC. Speaking to a larger trend, Manulife and other large pools of institutional funds have been pouring into prime office, commercial, and industrial real estate across Asia, Canada and the United States. Viewed as a safer bet than the stock market and delivering higher rates of returns than fixed income securities, increased international investment in real estate represents a renewed comfort level unseen since 2005.

For more information on the current international and commercial real estate climate within Washington DC and Northern Virginia, please contact Gene Mock at 703-342-8100.

US Life Insurance Giant John Hancock Acquires 1750 Pennsylvania Avenue NW, Washington, DC

Contact Gene Mock, Associate Broker, Premier Team, Keller Williams Realty 703-342-8100 for your real estate needs.

Gene Mock Realtor http://northernvirginiarealty.com/

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