August 5, 2021
Why We Believe the Legacy Fund is the Superior Real Estate Exit Strategy
Over the course of the last few decades, many investors have experienced significant success in the world of real estate ownership. The cash flow, appreciation, and tax benefits provided can be powerful; however, owners of appreciated real estate often find themselves in a bind as they consider divesting their portfolio. After years of long-term ownership, investors are ready to sell and move out of the active oversight of their property, but often have very little basis remaining and as a result can face material capital gain taxes. Though there are ways to potentially defer the realization of these gains, conversations of changes to the tax code leave many in this situation wondering: “what options do I have?” What tax-deferred strategies exist? Possible tax deferred exit strategies include selling the property in a 1031 exchange of “like-kind” property, investing in a Delaware statutory trust (DST) with the proceeds from sale, or contributing the property into an UPREIT. Although each of these exit strategies may potentially achieve tax deferral, they also come with some common shortfalls. Common shortfalls of other tax deferred exit strategies: 1031 Exchange – Timing constraints, trade risk, single asset risk and require active management or oversight DSTs –...
June 22, 2021
Why Contributing Property to the Legacy Fund Could be More Than a Smart Financial Decision
When planning an investment, it’s important to understand the impact it will have for you financially and the time and effort required to oversee that investment. What if one could alleviate the entire burden of ownership without losing the financial component? What value would you place on having more time with the people you love or doing what you love? When selling property and seeking to defer tax, investors often consider 1031 exchanges, Delaware Statutory Trusts or UPREIT transactions. While those offerings enable owners to defer tax, they may have some shortfalls, including time constraints, high fees, single asset risk, and/or public market volatility. While partnering with MLG Capital to navigate the waters of a 1031 exchange could be a better alternative than conventional tax-deferred solutions, an even better idea may be to partner with MLG Capital and contribute your property to the Legacy Fund. Unlike our series of closed-end funds, the Legacy Fund is perpetual and designed to allow accredited investors to contribute real property into the fund. It’s a compelling exit strategy for high-net-worth investors with appreciated real estate assets. There are three main benefits to contributing to the Legacy Fund. Passive Ownership Diversification Tax Efficiency One of the most intriguing...
