How We Can Help You
Our structured approach is designed to create maximum value for you.
- Discuss your overall situation, needs and goals on the sale of your farm or ranch.
- Point out potential sale structuring and capital gains tax saving strategies.
- Locate potential commercial investment properties for you by canvassing our nationwide network of commercial developers and brokers. Through our extensive network, you may have access to off-market properties, as well as those that are listed. Typically, we will review hundreds of properties to identify a handful that may be most suitable for your goals.
- Prepare for you side-by-side analyses of recommended properties, and give you our professional assessment of both the benefits and risks we see in each.
- Oversee your 1031 exchange to help ensure that all deadlines are met and, if necessary, back-up properties are identified.
- Conduct comprehensive due diligence on your chosen property(s). This is where our accounting and analytical backgrounds shine – we take a very thorough and detailed approach, as any of our clients, their attorneys and CPAs will attest.
- Contact you regularly once your commercial property transactions have closed. We are here to assist you with any aspect of your property going forward.
Examples of How We've Helped Folks: Case Studies
Showing you how we've helped other families may be the best way to demonstrate what we do, so please read our real-life case studies below.
Selling a Ranch Owned in a "C" Corporation with 18 Stockholders
Through gifting and inheritance, four Montana families received the family ranch from their folks. It was owned in a C corporation with 18 children and grandchildren as stockholders. Selling the ranch for cash would trigger a tax bill exceeding $2 million, wiping out more than half of the ranch's $4.2 million value. We worked with the family to find a better solution. After we explored various options, they ultimately:
- Sold the ranch for $4.2 million, using a Section 1031 exchange to reinvest all proceeds.
- Exchanged into an office building leased by the Social Security Administration under a 15-year full term, 10-year firm term lease.
- Paid $0 capital gains tax and preserved all the equity in the ranch.
- Secured a lease that provides them stable cash flow of more than $320,000 per year.
- May create new wealth by reinvesting the deferred tax dollars. Assuming an 8% average return, those deferred dollars could grow to nearly $10 million over 20 years -- thus creating a much larger estate for their heirs.
As with all our clients, the real story is in the details and how we helped them move from point A to point B.
Downsizing a Ranch Operation and Creating Supplemental Income
A married couple in Wyoming, now in their early 60s, wanted to continue ranching but wanted to slow down a bit and take more time for other interests. By selling their original ranch and using the 1031 exchange, this couple was able to downsize to a smaller, more manageable operation, set aside some cash, and secure a stable monthly income.
- They sold their ranch for $5 million and exchanged $2.4 million of the proceeds into a smaller operation.
- They exchanged over $1.2 million into an office building leased to the Social Security Administration, from which they expect to receive stable net cash flow of more than $96,000 per year, on average, for at least the next fifteen years.
- They took cash from the sale proceeds - roughly $1 million before taxes.
- By using the 1031 exchange, they deferred nearly $600,000 in tax -- deferrals that will, under current tax law, become permanent savings for their heirs if the couple holds the exchanged properties until death or continues to exchange into other properties until death.
- The deferred tax dollars that were invested into the new ranch and the Social Security building can create new wealth for this family. Assuming a weighted average annual return of 5%, that $600,000 could grow to nearly $1.6 million (pre-tax) over 20 years -- thus leaving a larger estate for the couple's heirs.
Please note: In order to protect the privacy of our clients over the internet, we've not used their names in these case studies. Please call us if you would like references.