Capital Gains Tax Planning

Disposition Case Study: Kentucky Apartment Buildings

A disposition case study on how sale structure, stepped-up basis, and asset allocation changed the after-tax result by more than $700,000.

Planning resource

A working asset for the next advisor conversation.

Use this resource to organize the facts, records, and timing questions before the planning window narrows.

Format

Case Study

Window

Sell

Output

CPA-ready

Sale structure impact

The gross price stayed the same. The after-tax result changed.

A $9 million sale could have produced a materially worse tax result without structure, basis, and allocation review before the agreement became fixed.

$9M

gross sale

Combined sale price for the three buildings.

$700K+

preserved

Value protected through structure and allocation.

properties

Apartment buildings owned by the family.

Case chart

Protected value relative to gross sale

The protected-value bar is shown as a percentage of the $9 million gross sale using the public case fact of more than $700,000 preserved.

Gross sale price

Full transaction size.

$9M

Protected value

$700K+ compared with $9M gross price.

7.8%+ of sale

Seller properties

All three needed the same tax lens.

3 buildings

Planning path

Step 1
Confirm stepped-up basis
Step 2
Challenge buyer allocation
Step 3
Restructure seller position
Step 4
Preserve after-tax proceeds

Case StudySellownerinvestoradvisor

Last updated: 2026-06-26

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Case-study issue

Three sisters inherited three small apartment buildings. When the properties were sold for a combined $9 million, the buyers wanted an asset sale that would help them maximize future depreciation benefits.

For the sellers, that structure could have shifted more proceeds into ordinary-income recapture instead of more favorable capital-gain treatment. With attorney-led restructuring, basis support, and negotiated allocation, the family kept more than $700,000 that could have been lost to tax.

Why it matters

The buildings, buyers, and price did not change. The after-tax result changed because the sale structure changed.

Planning checks before accepting terms

Has inherited or stepped-up basis been established and documented?
Is the buyer's requested allocation creating a seller-side tax problem?
How much of the gain could be ordinary-income recapture versus capital gain?
Should an attorney renegotiate the structure before the agreement is finalized?

JPOPE planning lens

Disposition planning starts before a purchase agreement is signed. A sale that looks identical on gross price can be dramatically different after tax.