Each day I get lots of questions posed on my www.savegainstax.com website. I look forward to answering as many as I can.
Very often, however, a question will be something like "My dad is selling an investment property he bought 20 years ago for 10K. It is selling for 500K. Is a Private Annuity trust the best option for him for tax purposes?"
There is no right answer to that question with the information provided. There are too many variables left unanswered. To even begin to know which strategies might be suitable, several other questions have to be answered. Pertinent information would be:
1. Age
2. Marital Status
3. Income needs
4. Estate planning needs
5. amount of current debt
6. depreciation taken
7. how is the property owned? as an individual, joint, tenant in common, partnership, s-corp, c-corp, LLC, etc
8. Purchase year
9. Purchase price
10. Sales Price
11. State of residence
12. State of property
13. Income tax bracket
14. Number of years until retirement
15. any other personal factors that influence decision
Without a complete analysis, there is no way to determine which tax strategy would be the most useful or even possible. If anyone jumps in with a recommendation without gathering all the facts, they are doing you a disservice. All information is completely confidential, but without it any specific reply would be groundless.
Paula Straub
http://www.savegainstax.com
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