Do the Research

By Doug Mayberry

May 21, 2018 4 min read

Q: My wife and I recently retired and are thrilled to be moving away to Florida to enjoy the sun. Before we do, we need to make some decisions about the duplex we own in Chicago.

We don't have a mortgage on the units, and we're doing well with the rental income. I've been managing the duplex by myself for many years, but both of our sons and their families are too busy to help out with the maintenance and management.

My wife thinks we should sell the duplex and give some money to the kids. What do you think is the best idea?

A: Do more research. My answer may be adding to your confusion, but you should seriously consider another side to the argument.

It sounds like you use your rental income as supplemental play money. If you sell flat out, you may be liable for major federal and state taxes. You'll probably want to decorate your new home, which often requires new furnishings — especially given the distance and different home. All these changes will be costly.

However, if you're still in good health and you want to continue managing your income property, you might consider an IRS 1031 real estate exchange. You will eventually need to settle taxes, but you could probably postpone most, if not all, of your taxes by trading your duplex for another income property in Florida. It may sound intimidating, but it isn't as complicated as it might seem.

Consult with a good real estate broker or your accountant to get more detailed information and learn about all the required regulations. Depending on the market and different state tax rates, your investment in real estate could be better than what you're now getting from your duplex.

If you don't want to continue managing your property, still speak with your accountant to investigate any other options. Waiting to make an informed decision will prove better in the long run. — Doug

ATM SAFETY

Q: There's a very convenient ATM near my retirement community, which I usually use to withdraw cash and confirm my account balances. Recently, I've become more and more concerned about the safety of doing so. Recently, there are stories in the local paper about robberies at some local ATMs.

What can I do to avoid some of the risk?

A: It's always good to stay careful. Whenever you withdraw cash, there is a window of vulnerability. Taking some reasonable precautions will alleviate most of your worries.

Stay alert when you are approaching the machine, and keep an eye out for anybody suspicious. Check around to see if anyone is lingering nearby. Nobody should be too close to the ATM while you are doing your business.

If you suspect something is wrong, wait. You can come back later to do your transaction.

Don't get distracted by talking to strangers or fiddling with your purse or wallet. Focus on the task at hand. If it's after dark, choose a machine with good lighting.

Make sure to collect your card, cash and receipt. Place them securely in your wallet or purse, but wait until you are at home or in a locked car to arrange your wallet.

If you think someone may have seen your PIN number, change it immediately. Banks recommend that you change it semi-frequently for security purposes.

If you're still nervous, it may be easier to go into the bank during business hours. Do what feels most comfortable to you. — Emma, Doug's granddaughter

Doug Mayberry makes the most of life in a Southern California retirement community. Contact him at [email protected] Emma, Doug's granddaughter, helps write this column. To find out more about Doug Mayberry and read features by other Creators Syndicate writers and cartoonists visit the Creators Syndicate website at www.creators.com.

Photo credit: at Pixabay

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