Much has been said about the natural beauty, wonderful year round weather, welcoming people and growing financial values in this magnificent place we call home, Sedona Arizona.

In addition to these and many other reasons to buy property in Sedona we would be remiss if we  did not inform you of three very important tax facts or strategies that allow you to keep as many of your pre tax dollars as long as possible. While we are not opposed to paying taxes, we feel you should only pay as little as the law calls for and no sooner than legally mandated.

Purchase property with tax deferred dollars in your retirement plans.

Many of you may not be aware that it is perfectly legal to use dollars in your IRA's as well as your 401K and 403B plans to purchase real estate. Most are not aware because these plans are generally controlled by banks, securitiy companies and insurance companies. These orgnizations are in or intersted in stocks and bonds and not real estate, so you are not informed of alternate investmentpossibilities. Because the stock market has not performed as well as many expected over the last several years we think you should consider real estate as an alternate or supplemental investment. Yes, investment properties, land and or buildings are what we are talking about.

The strategy is simple in concept, but technical in nature. Simply stated you rollover your deferred funds from a directed (by others) plan to a self directed (by you) plan. If the strategy is followed as directed by law, you actually get a checkbook to your own funds and that enables you to invest in realestate. Do not do this on your own, you do need professional advice. This strategy must meet you investment objectives as well as tax law.. We can help you with this strategy.

Exchange your property as opposed to selling it, tax free.

The IRS section 1031 tax free exchange is not new, but has been broadened to make it applicable to many more transactions than in previous years. If you have a property that has increased in value, and you want to sell it and buy other real estate, you will have to recognize the gain on your tax return. That means a portion of you sales price will be used to pay taxes and leave you with less money to invest in the new property. If you follow the broadened tax rules you will be able to trade the property you now own for the new property and pay no taxes on the trade. You need an intermdeiary ( middleman)  to help you do this by the rules. This plan allows you to use all your money, including gains, without paying tax at this time. We can help you with this strtegy.

Sell your personal residence at a gain and that gain avoids, not defers, tax.

We continue to meet people who are not aware of this tax rule that has been in effect for a number of years. If a single individual sells a home that has been your residence for at least 2 years, you pay NO tax on the first $250,000 of gain. If a married couple, filing a joint return, sells a home that has been their residence for at least 2 years, they pay NO tax on the first $500,000 of gain. In areas that have been experiencing good growth in real estate values, such as Sedona, there are a number of people who have been taking advantage of this strategy to grow their net worths and experience a number of beautiful homes every several years. We can help you with this strategy

Feel free to contact me to discuss how any of these tax saving strategies can work for you.

We encourage your questions on the above or any other isues relating to Sedona property.