Newbie to retirement planning and also to real estate.
My wife's practice (LLC) is strongly considering expansion with the purchase of an existing medical/ambulatory surgery building. 1/2 of the space is leased currently leased to an outside surgical specialty group and used as an ambulatory surgery center. They are going through the usual discovery, valuation, and expected capital expenditure reviews. Currently wife's practice is leasing space at another facility and I could understand the group's desire to own their own offices and have the flexibility of expanding.
My wife and I are probably both 2/3rd into our careers and thus looking at retirement planning. We are pretty frugal and at time of retirement, can probably utilize "0" % capital gain tax harvesting if we plan it correctly at age 55-70 1/2 before the pension (age 65), IRA RMDs, SSI kicks in.
But I have some reservations about the purchase especially on the unneeded risk. I have copied the various benefits and risks mentioned in this forum to my wife but was wondering about how this will affect our retirement tax strategy - specifically capital gain harvesting?
1) specifically the K1 proceeds from the rental income from the non affiliated surgeons leasing the ambulatory surgery portion. I would assume this would be still considered "active income" but could there be an instance were it would be "passive income?" I suspect some of this income would be offset by depreciation of capital expenditures.
2) at retirement and if the existing partners had to buy out my wife's portion of the building and she were to finance the loan, I would assume that loan interest is also income.
3) in general, all of this would be the same as for any brick and mortar real estate investments with tenants and is there any other tax consequences not obvious?
I realize the default of 15%/20% with capital GAINS is still very reasonable and who knows what the tax margins will be shortly. Also I am probably making something more complicated then it really is.
Thanks in advance guys and love our forum!
My wife's practice (LLC) is strongly considering expansion with the purchase of an existing medical/ambulatory surgery building. 1/2 of the space is leased currently leased to an outside surgical specialty group and used as an ambulatory surgery center. They are going through the usual discovery, valuation, and expected capital expenditure reviews. Currently wife's practice is leasing space at another facility and I could understand the group's desire to own their own offices and have the flexibility of expanding.
My wife and I are probably both 2/3rd into our careers and thus looking at retirement planning. We are pretty frugal and at time of retirement, can probably utilize "0" % capital gain tax harvesting if we plan it correctly at age 55-70 1/2 before the pension (age 65), IRA RMDs, SSI kicks in.
But I have some reservations about the purchase especially on the unneeded risk. I have copied the various benefits and risks mentioned in this forum to my wife but was wondering about how this will affect our retirement tax strategy - specifically capital gain harvesting?
1) specifically the K1 proceeds from the rental income from the non affiliated surgeons leasing the ambulatory surgery portion. I would assume this would be still considered "active income" but could there be an instance were it would be "passive income?" I suspect some of this income would be offset by depreciation of capital expenditures.
2) at retirement and if the existing partners had to buy out my wife's portion of the building and she were to finance the loan, I would assume that loan interest is also income.
3) in general, all of this would be the same as for any brick and mortar real estate investments with tenants and is there any other tax consequences not obvious?
I realize the default of 15%/20% with capital GAINS is still very reasonable and who knows what the tax margins will be shortly. Also I am probably making something more complicated then it really is.
Thanks in advance guys and love our forum!
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