01 · §721
You put the property in
Title moves to a nominee trust, with Clear Properties as the beneficiary. Not a taxable event.
01 Contribute
Put the property in. Keep the income. Stop managing it.
If you own rental property or land you have been sitting on, you can contribute it to Clear Properties in exchange for yield-bearing shares.
Selling it
Tax on the whole gain, this year.
Depreciation recapture, capital gains and state tax, all at once.
Contributing it
Shares. The income keeps arriving.
Under section 721, contributing property to a partnership in exchange for an interest in it is not a taxable event.
We are not your tax adviser. Everything here is how the structure works, not advice about your situation. Bring your CPA to the second conversation and we will send them the documents.
02 How it works
A contribution, not a sale.
Four steps, and none of them is a closing.
02 · 1:1 by value
You receive shares
Contribute a $437,000 property, receive 437,000 shares. No boot and no balancing mechanism.
03 · pro rata
The cash keeps arriving
Rent is earned at the project level, which pays taxes and management. The rest goes out to every holder.
04 · same terms
Nobody goes first
Clear Capital holds shares on the terms you do — same pool, no priority, no preferred return.
The agreement requires mandatory tax distributions, so you are never handed a K-1 for income you did not receive in cash.
03 The downsides
The honest downsides.
Five of them, and every one is a real cost of doing it this way.
- Shares are illiquid compared with cash
- You do not control the properties
- You get a K-1, which arrives later than a 1099 and your accountant will charge you for it
- The deferred gain still exists and comes due if you ever sell the shares
- Concentration risk moves from your one building to a fund, which is usually better but is a change, not a removal
04 Who this is for
Three people this is built for.
Tired landlords
You are done with tenants.
Rentals, ideally paid off, and no appetite left for three a.m. phone calls. Selling triggers everything at once. Contributing does not.
People holding raw land
Pooled, it becomes scale.
A parcel you bought meaning to do something with. One of them is hard to sell into a thin market. Together they can be financed and developed.
Homeowners with a backyard
A ground lease, and income.
Extension options, a removable unit and monthly income. You approve or decline decisions and Clear handles permitting.
05 One thing worth saying out loud
A contribution is designed to be held.
The window
7 years
not seven months — the window the anti-abuse rules turn on
The rules that make the deferral work also make frequent swapping in and out unworkable. If you are looking to trade property every couple of years, this is the wrong vehicle, and we will tell you that on the first call.
If you hold a portfolio rather than a property, or you are evaluating this on someone else’s behalf, Clear Capital sets out the structure.