- August 5, 2016
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Unfortunately, the taxman gets you in the end. Upon the sale of your building, you are typically going to have to pay at least two kinds of taxes: recapture tax and capital gains tax. Recapture tax is the tax on the building’s original cost minus any underappreciated capital costs. The capital gains tax is paid on the difference between the original cost and the value of the building at the time of the sale. You should also be aware of deemed disposition: building owners need to deal with tax issues while they’re alive and before they sell their building. These taxes come due when the building is passed onto your children, so you need to be prepared so you don’t burden them with these taxes. There are strategies you can use to minimise the taxes due, and we would be happy to discuss these with you.