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.

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Featured visual for Disposition Case Study: Kentucky Apartment Buildings, a JPOPE Capital Gains Tax Planning case study resource

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

Direct answer

Use this resource to organize the decision before deeper analysis starts.

Direct answer

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

Best planning window: When the properties were sold for a combined $9 million, the buyers wanted an asset sale that would help them maximize future depreciation benefits.
Facts that change the answer: Has inherited or stepped-up basis been established and documented? Is the buyer's requested allocation creating a seller-side tax problem?
Expected output: Case Study context packaged for an owner and advisor next step.

Ask the CPA or advisorWhich capital gains tax planning facts still need verification before the current decision window closes?

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.