As much as I hate writing about Trump because he’s a common criminal, but a very smart one, this article literally sheds proof on the fact that real estate is a long-term investment and almost always pays off handsomely over time. Time means years, not months, weeks or days. I never met a person who flips houses in a relatively short period of time that’s a multimillionaire. There’s surely no billionaires that do that because every time you sell a house, you got to pay tax and you don’t have that asset any more.
Your wealth is measured in what you own, not what you sold. Once you sell something, you got to pay tax, read the article. This Trump article explains it all. He was smart enough to know that when he sold a property in New York and made a billion dollar profit over 20 years, he would have had a huge tax liability. In order to get around that tax liability he did a 1031 exchange, which is done by wealthy, successful real estate tycoons all of the time.
A 1031 exchange is not for your everyday guy that fixes up a house and sells it. No. This is for the big players. This is how wealthy people avoid paying taxes on capital gains. It’s called knowledge. Knowledge is power. The article’s pretty interesting. To make a billion dollar profit on a piece of vacant land is amazing. And believe me, it’s done by many other billionaires, just like the Trump family, all over the world and they’re all using the 1031 exchange to shelter their gains.
In short, this article displays a perfect scenario in a perfect situation over time. And I repeat, over time means years. The wealthy billionaires hold properties for years and, as they hold those properties, they collect rent, which allows them to hold those properties because the rent they collect pays their taxes, insurance, maintenance, mortgage, etc.
Years later, when those properties double in value or even triple in value, some of them go up five and 10 times in value in a decade or two. That’s where the riches come in. That’s where the wealth is accumulated, not from some little dude sending out a newsletter on how to flip a house and make $20,000. That’s almost comical.
Study this article. There’s a lot to learn by reading between the lines.
Trump could face massive tax bill with proposed sale of office towers was originally published on The Real Deal.
About The Author
- Robert Louis Annenberg Is a 40 year seasoned property owner, manager, investor, builder/developer and business man who is also an author of five published books to date (Amazon.com) and the chief editor of LifeQuestJournal.com. He can be reached at: [email protected] and (201) 289-2500.
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