Raising Cash: What To Think About Before You Sell

My client Frank Durkin (not his real name) was tired of being a landlord. Although he liked collecting the rental payments from his 34-unit apartment complex, he did not enjoy dealing with tenant turnover and the round-the-clock stream of calls for repairs. He was also worried that the real estate market in Dallas, where the apartment complex was located, was overheating. So he put the building on the market and waited for a buyer.

A year and a half later, Frank’s property sold. He walked away with $7 million cash after selling expenses and taxes. To keep his money working, he reinvested the cash in several instruments designed to replace the rental income, including partnerships that invest in distressed properties and triple net leases. Now Frank’s monthly income is higher than it was when he was collecting rents from dozens of tenants, and his phone is silent in the middle of the night. He couldn’t be happier.

More Bang for the Charitable Buck: Gifting Appreciated Securities

If you are accustomed to writing a check whenever you donate to charity, don’t forget that many organizations would be just as happy to receive shares of stock. When you donate appreciated securities to a qualified charity, capital gains taxes are avoided.

You may receive a charitable deduction for the full market value of the securities at the time of the donation, even though your cost basis may be much lower. Because you are not selling the securities, you are not liable for capital gains taxes. And because the receiving organization is tax-exempt, it may sell the securities without owing any tax.

Going Green: Do Socially Responsible Investment Pay Off?

Some investors can’t bring themselves to put money into companies that they believe are harming the environment. Others want nothing to do with arms manufacturers, tobacco makers, or gambling casinos. Still others say that companies with poor working conditions or unfair hiring practices are strictly off-limits.