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RS Lease BuyOut

NYC Rent Regulation: Rent Control/Rent Stabilized, DHCR Practice/Procedures

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RS Lease BuyOut

Postby MondayTree » Sat Aug 11, 2018 10:44 am

Lease buyout funds:
What are your experiences with putting money directly into a trust?
What are the advantages?
Any other suggestions on how to deal with the money to decrease the likelihood of paying the high earnings income tax.
Thanks.
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Re: RS Lease BuyOut

Postby TenantNet » Sat Aug 11, 2018 11:06 am

Talk to a tax professional. This is a tenant site, not a tax site.

However I would look to see if there is anything similar to IRS Section 1031 that might be appropriate for this type of situation. Under the 1031 program, if one re-invests in a similar property, the capital gains can be deferred.

See https://www.irs.gov/newsroom/like-kind- ... ction-1031
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Re: RS Lease BuyOut

Postby MondayTree » Sat Aug 11, 2018 11:57 am

Thanks
Sorry, if the question was inappropriate I was curious how others handle buy out funds.
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Re: RS Lease BuyOut

Postby TenantNet » Sat Aug 11, 2018 12:21 pm

Not so much inappropriate, just off-topic.

There was a buy-out primer online a few years ago, but not sure if it's still around. But the two big caveats of any buyout are a) the percentage that goes to your lawyer, b) moving costs and c) how much goes to the IRS.

But even before that is the size of the buy-out. Yes, there are reports of extraordinary amounts, but that's usually the last tenant in a building where a developer wants to put up a tower.

For all others, the buy-out offers are moderate, if anything attractive. Figure out where you are going to find another apartment that might be RS or of moderately low rent, and how much the proceeds that are left will last. I wouldn't look at anything under 6 digits (and few LLs will offer that).
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