That old adage “What goes around comes around” has once again proven itself true. For years our real estate investments have produced significant tax shelter due to the depreciation allowances. Now I’m at the stage where we are refining our portfolio, reducing its size and condensing the workload to prepare for what we hope is a simple and care-free retirement. This process brings with it a series of unfortunate events (forgive me Lemony Snickets). Like it or not, sometimes you may have little choice but to sell a property(or properties) to meet your long term goals using the opportunities that present themselves. That happened to us this last year.
We had the opportunity to sell a property at a price that was simply too good to pass up. Recognizing that this would result in a taxable event, we went ahead and sold the property. I used the proceeds to pay down significant debt, thereby condensing the amortization schedules on other properties and allowing for retirement three to 5 years sooner than earlier expected. That all sounds great, but it carried baggage.
Now that tax time is here, my accountant called and suggested I make a payment toward the taxes due that I had not yet covered. He seemed concerned with the amount and I had to ask him three times before he told me what he anticipated I owed. It was like getting hit in the head with a brick. The figure was three times my annual salary!
I’m not exactly sure how to come up with this huge block of funds. (Perhaps huge is too aggressive a term to use to describe the amount, but I certainly don’t think so.) As a matter of fact I have no clue. However, I have found that if I simply take a little time to allow the sea to calm and give it some directed thought, a way will appear. My life’s experience teaches me that the world will move aside and let any man (or woman) pass as they move toward their goals. So once again I declair, get out of the way, cause I have work to do, problems to solve and goals to reach.