1031 alternative

April 17, 2014 at 10:34 pm

Jackie Lange

I’m in Panama City getting ready for a tour that starts on Saturday. Tomorrow morning I’m going to look at a house which overlooks Lake Gatun, the big lake that feeds water to the Canal. The proeprty is on 1 1/4 acres, has a 3 bedroom 2 bath house plus a casita ( small house) for the caretakes and a big garage.

The owner has not been to the house for more than a year. He had a stroke and moved back to the USA.

He would like to trade one of my Dallas rentals for his house. He has a daughter in Dallas and would like to live there

The plan is to sell my dallas house to him for $50,000, which is my basis, and he will sell me his house for $50,000

My house is worth about $150k. His house is worth about $170k but it is not about the cash, it is about getting something you want more than what you have.

I want to liquidate my properties in texas and use the money to buy property in panama

If I sell for retail prices, I will owe 20% capital gains plus 3.8% obamacare tax. The last thing I want to do is give more money to the government in the US

If he sells for less than $60,000, he will owe no taxes in panama.

So, by both of us selling at a lower price, we both benefit.

If the house looks as good in person as it does in pics, this will be a go.

My plan is to rent the house out.

There are no property taxes for 10 more years and insurance is less than $250 a year so my net cash flow will actually go way up if I get this house. (there is are property taxes the first 20 years in panama and the house is 10 years old)

The boat dock is 5 minutes from the house and the lake has world records for peacock bass — what ever that is– so it will appear to people who like to fish.