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Tax and Estate Planning Benefits

Tax and Estate Planning Benefits

Tax & Estate Planning Benefits of Senior Housing Investments

Strategic investments in senior housing can unlock powerful tax advantages and estate planning tools for high-net-worth individuals, family offices, and advisors. Here’s how you can enhance after-tax returns while preserving generational wealth:

🏙️ Opportunity Zone (OZ) Funds

Qualified Opportunity Zones offer the ability to defer, reduce, and potentially eliminate capital gains taxes through investments in underserved areas.

  • Capital Gains Deferral: Defer taxes on prior gains until 2026 if invested in a QOF within 180 days.
  • Tax-Free Appreciation: After 10 years, any gains from the OZ investment itself are 100% tax-free (IRS FAQ).
  • Impact + Incentives: Supports revitalization in high-need areas with long-term wealth-building benefits.

💼 Deferred Sales Trust (DST)

A DST allows you to defer capital gains tax on the sale of a highly appreciated asset by transferring proceeds into a specially structured trust.

  • Tax Flexibility: Spread out tax liability across years while reinvesting into income-generating real estate.
  • Estate Planning Benefits: Control distributions to heirs and integrate with wealth transfer strategies.
  • Multi-Asset Reinvestment: Allows allocation to senior housing, stocks, private credit, etc. (Capital Gains Tax Solutions).

📉 100% Bonus Depreciation

Until 2025, investors may deduct 100% of qualifying asset improvements in year one, significantly reducing taxable income.

  • Accelerated Write-Offs: Deduct certain real estate components using a cost segregation study.
  • Improves After-Tax Returns: High-income earners can offset passive income or gains.
  • Ideal for Renovation or Value-Add: Applies to HVAC, appliances, flooring, and more (Cost Segregation Services Inc.).

🏡 Step-Up in Basis & Legacy Wealth

Real estate passed to heirs receives a "step-up" in cost basis to its fair market value, potentially eliminating capital gains tax.

  • Capital Gains Reset: Heirs inherit at the market value, avoiding years of accrued tax liability.
  • Foundation for Multi-Generational Wealth: Use in combination with irrevocable or dynasty trusts.
  • Holds Value in Recessions: Senior housing generates income even during market volatility.

Disclaimer: Haven Senior Living Partners is not a law, tax, or financial advisory firm. The information provided above is for educational purposes only and should not be considered tax or legal advice. Please consult with your CPA, attorney, or financial advisor before making any tax-related decisions.