You bought your investment property for the sole purpose of making money. But the profits should still roll in once you decide to part with the property and sell it. When it comes time to list your investment property for sale, getting the most money out of the deal is most likely where your focus is.

While selling an investment property is somewhat like selling your home, there are a variety of capital and tax issues that can make this type of sale more complex.

Here are some things to consider in order to make the most money when you sell your investment property.

Make Sure Now is a Good Time to Sell

Before you list your property, make sure you’ve considered all avenues to determine whether or not it’s a good idea to let go of it. There are all sorts of reasons why you might want to sell, such as freeing up some capital to take advantage of a better investment, getting out of a declining neighborhood, or dropping down a notch on the tax bracket ladder.

If you’ve held onto your investment property for a long time, odds are it has greatly increased in value. As such, you can probably make a hefty profit and take those monies to branch out and diversify your real estate investment portfolio with other investment properties.

Whatever your reason might be for wanting to sell, you need to be aware that there are major tax issues that you will have to contend with that could take a chunk out of your profits. Just make sure you’ve crunched the numbers to make sure you don’t walk away in the red.

Attract the Right Buyers

Other real estate investors are the obvious target when it comes to marketing your investment property for sale. However, there may be other types of buyers out there that may be interested in the property. You may have been using it to bring in a steady income through rent, but you may be able to attract a variety of other types of buyers.

Some buyers may be interested in living in one part of the building while renting the other part out to help with the mortgage. Or perhaps the renters who are already living in the unit might show interest in becoming owners themselves, in which case your potential buyer is right under your nose. Your real estate agent will be able to help you diversify your options when it comes to marketing the property for sale so you can attract as much interest in it as possible and draw in a solid offer.

Understand Capital Gains

When you sell an investment property, you’ll be slapped with a capital gains tax bill that you’ll have to pay, which is a lot more than the taxes you would have to pay upon the sale of your primary residence. Essentially, capital gains refers to the profit you make from the sale of your investment property, which will be taxed. For instance, if you sold an investment property for $500,000 and you originally bought it for $400,000, you would make a $100,000 profit, which is what would be taxed. 

Any depreciation that you claimed against the property will cause the basic capital gains to increase. That means that if your investment property lost money while you owned it and you used such losses to reduce your tax bill in the past, your capital gains taxes will be higher once you sell. Using the above example, if you deducted $40,000 in depreciation during the time that you held title on the property, that $40,000 would be added to the $50,000 profit, and you would therefore be taxed on $90,000 instead of $50,000.

Capital gains taxes are also affected by how long you’ve held onto the property. If you’ve owned it for less than a year, the property would fall under the short-term capital gain category, which means it would be taxed like income. However, if you owned the property for more than a year, it’s considered a long-term capital gain, in which case it would be taxed at a lower rate. 

Avoiding Capital Gains With a Rollover

There is a way to avoid paying capital gains on the profit you make upon the sale of your investment property, and that’s by putting the proceeds of the sale directly into escrow that will be used to purchase another investment property. IRS Section 1031 allows this tax deferral, which could save you a pretty penny come sale time. This 1031 exchange of similar properties is a strategy that you can use repeatedly with no limit, so you can essentially trade similar properties as many times as you like while expanding your investment portfolio on a tax-deferred basis.

It should be noted, however, that there is a 45-day time limit that these proceeds can sit in escrow before being put towards a new property. This type of arrangement needs the expert assistance and advice of a seasoned lawyer and/or tax advisor to set up.

Setting Up an Incorporation to Take Advantage of More Favorable Tax Rules

More and more real estate investors are looking at incorporating in order to reduce their personal liabilities and pay fewer taxes upon the sale of an investment property. If you’ve hired property managers to help you handle your portfolio of income-producing properties, incorporating can reduce the amount due for taxes when you sell. Any profits made will be funneled through your corporation.

However, you won’t have easy access to any monthly income coming in from you investment property if it’s under your corporation. If you rely on that monthly rental income for any reason, an incorporation may not be ideal.

The Bottom Line

The return you receive come sale time will depend on how much the property has appreciated in your market, how long you’ve owned the property, how much you have left on the mortgage, and so forth. Selling an investment property is a more complex and intricate process than simply selling your residential home. From specific marketing tactics, to maintaining compliance with the IRS, to avoiding having to pay more taxes than necessary, the sale of your investment property should only be done with the right help enlisted.  Done at the right time and with the right tactics, there’s little reason why you shouldn’t realize a sizeable profit upon the sale of your investment property.

As we bid adieu to 2016 and welcome in 2017 this weekend, Chicago once again offers New Year’s Celebrations for Everyone!

For those who love to celebrate with a big crowd, returning this Saturday (8:00 p.m.) to Michigan Avenue and the Chicago River in the Streeterville neighborhood for its 2^nd year is Chi-Town Rising after its successful debut last year as the largest New Year’s Eve celebration in Chicago’s history! This year will feature a larger outdoor viewing area on both sides of the Chicago River offering secure viewing for locals and visitors to enjoy free of charge. Once again video screens will provide entertainment and an outdoor countdown to midnight which culminates with a Rising Star ascending 360-feet into the air on the Hyatt Regency Chicago’s West Tower and a fireworks display synchronized to music plus more!!

For families with those too young to stay up all night, the popular Family Countdown Celebration returns this Saturday (3:00 p.m.-6:00 p.m.) to Millennium Park’s Wrigley Square (201 E. Randolph St.) in The Loop. Families will get to enjoy free hot chocolate and cookies from Remington’s, live entertainment and even an official countdown celebration at 6:00 p.m.! Also, families will be able to experience how New Year’s is celebrated around the world at this year’s “Around the World for New Year’s Eve!” Activity stations will feature fun customs from countries all over the world and kids will get a special passport so they can receive a stamp at each station they visit!!

For those with sea-legs, well lake-legs, you can kick it into high gear on Mystic Blue Cruises’ New Year’s Eve Fireworks Dinner Cruise this Saturday (8:30 p.m.-12:30 a.m.) from Navy Pier (600 E. Grand Ave.) in the Streeterville neighborhood. Your cruise includes a buffet dinner, a platinum open bar, live DJ entertainment, a champagne toast at midnight and views of the fireworks display (weather permitting of course)!!

For all my Singles out there, Chicago Joe’s (2256 W. Irving Park Rd.) in the North Center neighborhood will be hosting Chicago’s Largest NYE Singles Party this Saturday (8:00 p.m.).  Your celebration includes 2 free drink tickets, a complimentary appetizers buffet (9:00 p.m.-12:00 a.m.), drink specials, top 40’s music all night long, fun ice breakers, great prizes, complimentary party favors and a complimentary champagne toast at midnight! Who knows, you may even end-up with a Midnight Kiss!!

Perhaps you prefer to dress-up as someone else for your celebration. Then NYE Back to the Future may be just for you! Come dressed as your favorite Back to the Future Character at Whiskey Business (1365 N. Milwaukee Ave.) in the Wicker Park neighborhood this Saturday (9:00 p.m.-3:00 a.m.). Enjoy an evening of drinks until 1:00 a.m., a buffet table until 11:00 p.m. and a champagne toast at midnight! And, Best Group Costume gets a bottle of champagne!!

For all those who are NOT into all the glitz and glamour, head on over to New Year’s Eve at Southport Lanes located at 3325 N. Southport Ave. in the Lakeview neighborhood this Saturday (8:00 p.m.-1:00 a.m.) for an evening filled with appetizers and small bites, a premium bar which includes their excellent draft selection, a champagne toast at midnight and, of course, all the gaming (bowling & billiards) you can commit to!

Finally, for those who have celebrated a little too much the night before, or just simply want to start their 2017 on the right foot, or left foot, the New Year’s Day 5K Run & Walk will be held on Sunday from 11:00 a.m. to 2:00 p.m. at Stockton and LaSalle Drives (100 W. LaSalle Dr.) in the Lincoln Park neighborhood.  Afterwards, participants can head over to Select Cut Steakhouse (2808 N. Halsted St.) for the post-event which includes a free beverage, awarding of winner medals and raffle prizes. Also, a $15 Classic American Buffet Breakfast will be available from 12:00 p.m. to 2:30 p.m.!!

Looking Forward to Another New Year of Great Entertainment Here in Chicago! Happy 2017 Everyone!!

SUE MOSS & DEAN’S TEAM CHICAGO

The original Pequods Pizza was opened in “1970 in Morton Grove where they started a cult following for its pan style pizza with a caramelized crust edge.”  Ownership changed hands in 1986 and the restaurant was reinvigorated for years. Pequods has always had their own cult following with former patrons making the journey to the northwest suburbs for their favorite pizza. As the love of their pizza grew, Pequods opened a new location located at 2207 N. Clybourn Avenue in Lincoln Park. In 2006 the Chicago location had a fire and had to be closed for almost five months. The patience of these loyal customers was rewarded with a newly remodeled restaurant with big screen TVs and full service bars on two levels of seating.

Obviously their main dish is pizza. I would recommend trying the traditional style. They pride themselves on the crust so you’re going to get a thicker crust on the bottom and the caramelized crust edge is something to be experienced. I would also suggest the thin-crust pizza, though not as well recognized is still extremely tasty. The pizza is made to order which means you’ll wait so you’ll probably want to order an appetizer. I’ve been several times so I’ve got a couple favorites on my list. I’m especially fond of the hot wings. They are spicy, meaty and only slightly messy. A couple other good choices are the jalapeno poppers or the cheesy garlic bread.

When it comes to service for such a busy location they really hold it together. The staff is helpful when you have questions. They get high rankings for keeping your meal moving along through all the bustle. They do not take reservations so you’ll want to arrive early especially on the weekends because you could wait up to an hour for seating. It is a very family and group friendly location with a casual atmosphere.  The cost is affordable at $11-30 per person without drinks.

CATHY MALLERS & DEAN’S TEAM CHICAGO

Now is the time of year for many of us to plan our goals for 2017. For a long time, I along with many others would decide on “resolutions” for the new year. These usually involve losing weight and going to the gym. Unfortunately, 2 or 3 weeks into the year most resolutions are not fulfilled. There are several reasons for this. The first is calling them resolutions, I prefer to call them goals. 

The second is no proper planning. Okay, I’m going to lose weight. Well, how are you going to succeed? You must have a plan with a specific end result. Be realistic, safe weight loss is about a pound a week. Start out with a food diary. Many of us mindlessly eat with little thought. Less carbs more protein is the best way to go. Moderate exercise with aerobic and weights really help. But the lesson here is PLAN!

The third reason many goals fall by the wayside is no accountability. You need to have someone with whom you share your plan and who will encourage you to keep on track. It’s a lot harder to miss an exercise class when you have a friend to exercise with or simply someone you connect with weekly that will hold you accountable for slacking off. I know that doing the task I’d planned was easier than admitting to my team why I didn’t.

Fourth is unrealistic goals. This often results in deciding “why bother?” An easy excuse to forget about the whole thing. Start easy, especially with something like weight loss. A person who hasn’t exercised in 10 years shouldn’t start with cross-fit! Start walking and doing as many reps as you can with small weights before going on to larger ones. In business going from a ten deal year to fifty is simply not happening.

I have focused here on mainly getting fit but these steps work just as well with business goals. Those of us who are self- employed know how to assess our numbers from year to year but many still neglect to make serious plans. But you folks working for others can still make goals. Go to your boss and say, “I’m making goals for my year, where can I improve?” You will put yourself head and shoulders above the rest.

So, make your plan, find an accountability partner and be realistic and you may find that many of your goals will be reached and maybe even surpassed.

KATHLEEN WEAVER-ZECH & DEAN’S TEAM CHICAGO

Ready or not, the Holidays and the end of 2016 are nigh! Our neighborhoods are keeping us engaged down to the wire with celebrations, openings, closings, and assistance for keeping kids busy during Winter Break.

PORTAGE PARK

What are you going to do with the kids during Winter Break? Art Side Out Studio at 4041 N. Milwaukee Ave. #302 offers Art Day Camps solutions that coincide with Chicago Public Schools’ break schedules. The Winter Break Art Day Camp will run for 10 week days between Monday 12/26/16 – Friday 1/6/17 between the hours of 10:00 a.m. to 2:00 p.m. All ages are welcome to be led through arts and crafts activities including owner Jeff Semmerling’s specialty, mask-making. Pre-registration is not required but please call Jeff at 773-687-5012 ahead of time for further information as prices may vary: $40 one day of camp; $110 three days of camp; $35 per day for four or more days of camp. Please pack lunches for your children as lunch will not be provided by Art Side Out Studio.

LINCOLN SQUARE

Everyone is welcome for Chanukah in the Square at Giddings Plaza on Monday, 12/26, 6:00 p.m.  – 7:00 p.m. The Celebration of Light is presented by the Chabad Lubavitch Jewish organization and culminates with the lighting of a grand Menorah. There will also be children’s entertainment, music, hot latkes and donuts for this hour-long event that begins at 6:00 p.m. sharp. Don’t be late!

OLD TOWN

The five-year-old American cuisine restaurant, Perennial Virant, is winding up to its last hurrah its last day of service on New Year’s Eve as this iteration of Boka Restaurant Group’s establishment will be going through re-conceptualization in 2017. There’s no reason for tears since Chef Paul Virant will continue cooking at his suburban restaurants, Vie in Western Springs and Vistro in Hinsdale. Stay tuned to see what becomes of Perennial Virant with Boka Restaurant Group partnering with Ryan See (co-owner of Compass Bar and Bridge House Tavern) and Dan Warren (owner of Common Ground, New York). These restaurateur professionals definitely know how to deliver. In the meantime, be sure to Reserve Your Table at Perennial Virant while it’s still 2016.

WEST LOOP

Catering company, Paramount Events (1750 W. Lake St.), has found a way to showcase their food and hospitality services year round by opening its restaurant, Eden, at 1748 W. Lake St. this month. The kitchen creates cuisine inspired by the cultures of Portugal, Lebanon and Spain and have an on-site 1,800-square-foot greenhouse for homegrown vegetables. Regular hours are Tuesdays – Wednesdays 5:00 p.m. – 11:00 p.m.; Thursdays – Saturdays 5:00 p.m. – 10:00 p.m.; and Sundays 5:00 p.m. – 10:00 p.m. Call ahead (312-366-2294) since the Holidays are sure to affect operating hours or to make your reservations for the New Year’s Eve seating.

EVANSTON

My personal interest in truthful American history recently led me to stumble upon the 2010 documentary The Lost Civilizations of North America. The documentary may be too heavy for little ones but it’s never too early to ignite their curiosities about the people and the cultures that thrived before modern American history began. Mitchell Museum is one of the few North American museums dedicated to the preservation of Native American artifacts and contemporary artwork which has been in operation since 1977. So I am thrilled to report that Mitchell Museum of the American Indian at 3001 Central St. is open for Winter Break through 1/6/17, except 12/24/16 – 12/26/16 and 1/1/17 – 1/2/17, to offer DIY All Day Crafts to keep kids busy from 10:00 a.m. – 5:00 p.m. Adults will need to be present for children to participate. There is no age requirement but activities are generally recommended for children aged 5 years and over.  For more information, call 847-475-1030.

CATHY MALLERS & DEAN’S TEAM CHICAGO