If untouched, capital gains rates will automatically revert to 20% on December 31, 2010. Currently the rate stands at 15% and if the Obama Administration makes good on earlier indications, the rate could be raised even higher to 28%.
With capital gains rates set to increase, it only makes sense that more people will want to defer their impending tax burdens by transferring their wealth through 1031 exchanges. Furthermore, it could be possible that the Net Lease market segment will benefit greatly from this.
Net Lease Investments, which are characterized by their long term stability and hands off managerial approach (functioning like a bond), could afford people an opportunity to avoid their large capital gains hit while retaining a revenue producing asset which requires no personal management.
Instead of selling ones $1 million asset and bearing a $200,000 to $280,000 loss through capital gains taxes, you could exchange that asset for a net lease building, defer taxes, and get a monthly income stream.
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