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Case Study: Sale of a Four-Plex Investment Property Located in Phoenix, AZ


The owner of a four-unit investment property found a buyer willing to pay $2.4 million for the property and entered escrow.  He, however, soon discovered from his CPA that he would have to pay more than $600,000 in federal and state taxes, leaving him with just over $1 million when escrow closed.

TaxWealth Solution

While in escrow the seller lawfully sold the property to an intermediate buyer using a specially crafted installments sale planning approach. At close of escrow the intermediate buyer sold the property to the end buyer for the same amount and terms originally agreed upon with the seller.  By implementing this planning approach, the property owner deferred the capital gains taxes and collected $1,558,952 tax-free when escrow closed, increasing the amount he received by more than $469,000 as compared to what he would otherwise have had after-tax.

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