Some of the last remaining tax shelters of any real consequence are in the real estate arena. Combined with the fact that residential real estate is well known to be a high-performing asset over the long haul, its favored tax status holds the potential for richly rewarding the purchase and sale decisions of thoughtful homeowners. Because of the generally large numbers involved, the tax implications of real estate transactions can be enormous. Because of the complexity and continuing evolution of the tax codes, what worked for your buddy at the country club in his specific circumstances three years ago quite possibly is completely irrelevant to your specific circumstances today. Therefore the current rules of real estate taxation must be taken into account whenever you are evaluating a potential transaction. Buying, selling, lease vs. buy decisions, exchanges, property investments, rentals, converting property between income and primary residence use, statutory exclusions of gains, gifting of properties, estate considerations -- all have tax effects which can be quite significant, and are very likely to be different than they were some years ago.That being said, the tax impact of a real estate transaction shouldn't always be the driving factor of a property decision. At some level, you're the one who worked hard to acquire your properties, and you're the one who should decide what to do with them. But taxation is bound to be an important consideration nevertheless, and its short and long term effects aren't always intuitively obvious. What this means for the thoughtful real estate buyer/seller/ owner/investor is that he or she should be well represented by professionals from at least two disciplines: A professional Realtor with considerable local market knowledge and business experience, preferably one who resides and invests in local market properties himself or herself (as I have said elsewhere, it's not the license, it's the knowledge), andA Certified Public Accountant, Certified Financial Planner, real estate attorney, and/or trust attorney, as your situation may dictate, with equally relevant experience in real estate transactions of the type you are contemplating. Note: We're not talking about a generic tax preparer here, nor even a brilliant and successful relative who knows nothing of your specific tax situation.Because I am no longer a practicing CPA (and real estate taxation has changed considerably since that time anyway), I have developed a network of highly qualified financial & legal experts (CPA's, CFP's, real estate & trust attorneys) who are very well qualified to provide you with the real estate tax planning guidance you may require when considering a transaction. Please don't hesitate to ask for a referral should you not already have access to a trusted California real estate tax professional. David J. White is a licensed professional Realtor, South Bay Brokers Inc., with a clear focus on client service excellence and top flight ethics. In addition, he develops high quality luxury homes though Van Zanten & White Development. Born and raised in Southern California, David earned BS (summa cum laude) and MBA degrees from the Marshall School of Business at USC, and has lived and worked in the Beach Cities for the last 15 years. Known as a skilled negotiator, investor, strategist, and problem solver, David brings a wealth of business knowledge, experience, and perspective drawn from leadership roles in such organizations as McKinsey & Co., Oracle Financial Services (formerly Treasury Services Corp.), Union Bank of California, and PricewaterhouseCoopers. Backed by the unmatched network and resources of South Bay Brokers, Inc., he is uniquely positioned to serve as a trusted real estate advisor. David is a member of the National Association of Realtors, the California Association of Realtors, the American Institute of CPA's, the Los Angeles World Affairs Council, Journey of Faith Church, and the Manhattan Country Club. Professionally with South Bay Brokers he has partnered up with Laura Grabher to offer continuous 24/7 support, marketing, and service. He lives, works, invests, volunteers, and (most importantly) raises his son James in the beautiful beachside community of Manhattan Beach, California.
