Wednesday, December 31, 2008

Happy New Year 2009

Well, another year down and what a year it was! Unfortunately, for many not such a good year financially.

Retirement accounts, savings, home values are pretty much down across the board. Layoffs are compounding and unless we can get people back to work, more will lose their homes, savings and most likely benefits such as health insurance coverage. None of this is good news and will start 2009 on a down note.

On the upside, we have a new president coming into office, and he has hopefully engaged the right brain power to begin to turn things around over the coming months.

On the upside, if you have a steady job and good credit, opportunities abound with the ability to refinance at a low rate and buy stocks and property at sale prices. If only the majority of people fit into this bracket!

So, my wishes for the coming year are job creations, a consumer confidence rebound, health care reform and not an excessive amount of tax increases. Also, less war worldwide would be a very welcome change.

So all the best for a happy, healthy, and prosperous year ahead.

Paula Straub

Wednesday, December 17, 2008

What Will Obama Do With Capital Gains Taxes?

Dow Jones Newswire reports that President-elect Obama's plans include:

Exempting seniors earning less than $50,000 from income tax.

Increase the top two marginal tax rates from their current levels of 33 percent and 35 percent to 36 percent and 39.6 percent, respectively. Based on 2009 income thresholds, that would result in a tax increase on singles making $171,550 or more and married couples making $208,850 or more.

Taxpayers in those brackets also face increased taxes because President-elect Obama plans to restore phase-outs of personal exemptions and itemized deductions. This means that high-earners would not only face higher tax rates, but they would also lose some or all of their personal exemptions and itemized deductions.

Obama has also proposed raising the tax rate on capital gains income from 15 percent to 20 percent for single taxpayers making more than $200,000 and for married couples earning more than $250,000 annually.

Of course, nothing is set in stone yet and some of these issues may not be addressed until well into his term, depending on the economy.

We can be sure, however, that at some point the government will have to be paid back for all the billions or trillions of dollars it is spending to stabilize our financial infrastructure.

This will most likely be done through tax increases, so minimizing taxes becomes more important than ever. I’m glad my practice will benefit throughout the foreseeable future!

Paula Straub

Fill out a Confidential Qualification Questionnaire and see if you qualify to save capital gains tax. Go to

Listen to my weekly radio show “Simply Wealth” at

Friday, December 12, 2008

If It Sound Too Good To Be True...

If it sounds too good to be true… yep, it usually is.

You’ve heard this saying time and time again, but it is not always easy to know when you are simply following existing guidelines to save money and grow your profits, or when you are tempted to “go for the bleachers” and fall prey to a party who promises you the moon but delivers nothing but heartache. I always go by the motto that it is better to under promise and over deliver than vice versa.

Even wealthy investors are easily misled when dealing with the mask of seemingly successful individuals whose motives often come down to personal greed and arrogance but initially appear to offer a brass ring.

I’m not sure any of us saw the downfall coming of major banks, investment firms and large corporations. It seems even their leadership was mislead into believing some of these complicated investment vehicles were safe and prudent.

However, there are many red flags to look out for that have held true for years. Here are just a few at the top of my list.

* Don’t get fooled by someone wearing a 4K suit and driving a Rolls Royce. Give me a guy like Warren Buffet any day. Even though he’s one of the wealthiest men in the world, he lives in the same house he bought 27 years ago and drives a modest car. I find many people who flaunt wealth come into it at the expense of others they have taken advantage of. They are the only ones that get richer until they get caught doing something illegal or immoral.

* If history shows the average investment return in a vehicle such as stocks or mutual funds is 7 or 8 percent on average over time and someone tells you they consistently get 12 or 15 or 20 percent annually even through bad times, make sure they are able to explain exactly how this is being done. It may be possible, but chances are they are luring you in with empty promises and you only find out once you have lost money that these claims were untrue or exaggerated.

*If someone tells you they are letting you in on an investment typically only available to a very select group – beware. I have seen even an educated man fall victim to this sort of desire to “play with the big boys”. There is often a cloak of secrecy surrounding the details that can’t be disclosed due to “protecting the sources” who deal only with the well healed. It’s usually a scam.

* Legitimate companies value transparency and disclosure. They have nothing to hide and are willing to “show you where the money is” at all times. I don’t like companies that tell you their investments or structures are all proprietary and unique only to them so they aren’t able to disclose the details unless you give them money first.

* Know that any unregulated investments are just that. They can set their own rules and are buyer-beware. This is why hedge funds and the like take huge risks and can either sky rocket or go belly up in a very short time.

In this world where governors try to sell Senate seats, former NASDAQ chairmen run Ponzi schemes, company execs pay themselves huge salaries while their companies and stock holders go broke, and politicians fall to scandal, it makes sense to stick to the basics.

This doesn’t mean burying your money in the backyard or not doing everything you can to maximize what you do have, but don’t jump at a chance to gamble on hitting a home run when taking one base hit at a time will usually win the game and allow you to sleep at night.

Paula Straub

Fill out a Confidential Qualification Questionnaire and see if you qualify to save capital gains tax. Go to

Listen to my weekly radio show “Simply Wealth” at

Tuesday, December 02, 2008

Year End Tax Planning

December always brings its share of stresses along with the enjoyment of the holiday season. This year has not been a banner year for many families so the holidays may not be as much fun as in previous years.

Year end also deserves a close look for tax planning. Even though taxes are due in April, whatever balancing doesn’t get done in December sets the tax consequences for the previous year.

Here are just a few things to consider:

If you had gains should you look to sell assets at a loss to minimize the taxes? If it is stocks, you can always buy the loser shares back after 30 days if you feel they will go up in value again soon.
If you had losses, should you look to sell something you’ve been putting off at a gain? This year watch for exceptions to withdrawal from retirement accounts that may pass Congress at the last minute.
If you had gains, can you add extra to existing retirement accounts or open new ones to reduce your income?
If you are planning to gift children or grandchildren make sure you take advantage of the 12K yearly exemption per person to the gift tax limits.
Be aware if you own mutual funds outside of a retirement account that you may get a distribution which is taxable even if you still own the funds. Be sure you have the extra money to pay the tax bill.
If you are a business owner with extra income consider purchasing equipment which can be depreciated at an accelerated rate.
If you are self employed, consider deferring income into the next tax year if possible.
High income earners, watch out for the AMT tax trap. Have a tax professional do a quick computation to see if this will catch you before it’s too late to do something about it.

I know this may not be at the top of your list for fun things to do, but it’s better to spend some time now than be surprised in April when it’s too late.

Paula Straub
Fill out a Confidential Qualification Questionnaire and see if you qualify to save capital gains tax. Go to

Listen to my weekly radio show “Simply Wealth” at

Wednesday, November 26, 2008

Thanksgiving Wishes

Happy Thanksgiving! Just wanted to send a quick note to let you know how thankful I am for all my subscribers. In turbulent times such as these, I know I have to stop and count my blessings for the things I do have.

I have been a little remiss on sending updates on capital gains tax issues and on what may be changing in the next year or soon after. A lot is still up in the air as the feds try and stabilize the economy and the credit markets but I’ll keep you informed.

The best spot to keep abreast is to listen to my weekly radio program Simply Wealth on I spend a lot of time putting together each program to reflect what is happening week by week and provide information and education that you can use. All you need is 30 minutes and a computer with speakers to listen any time of the day or night.

I’m also always looking for topics which are important to you, so send me an email if you have something you’d like me to discuss or even a guest you’d like to hear interviewed.

Have a terrific holiday and I’ll be in touch again soon.

Paula Straub
Fill out a Confidential Qualification Questionnaire and see if you qualify to save capital gains tax. Go to

Monday, July 07, 2008

Making the Tax Bill More Bearable When Selling A Business - Option 2

So, you’re selling your business and have received the shock from your CPA of how much of the proceeds will be passing directly to Uncle Sam if you don’t implement a tax saving strategy prior to sale.

Depending on the type of business you are selling and where it is located, this amount could be between 15-50% and is usually on the higher end of that range.

In the last article, the Self Directed Installment Sale was outlined and now another option will be presented. There are so many variables involved with each sale, there is never any one size fits all “best” option. It is important to work with someone familiar with all options available, so each can be compared and considered for your unique circumstance.

If you have the need for an immediate tax deduction, perhaps to offset other gains or simply in exchange for contributing to a non-profit close to your heart, consider a Charitable Installment Bargain Sale (CIBS). Don’t confuse this with a Charitable Remainder Trust (CRT) because you are not pledging the asset to charity on your death.

In essence, you notify a participating non-profit 501(c)3 corporation that you will do a CIBS and find a buyer for your business. You negotiate the sales price using a fair market value. You donate a percentage of the FMV to the charity and they buy the asset from you at a discount and sell to your buyer in a simultaneous close for the agreed upon price.

You receive a tax deduction for the amount donated and partial tax forgiveness on the allocated tax percentage for that donation. The remainder of the proceeds is returned to you over time with interest via an installment contract between you and the non-profit.

You have the advantage of paying the taxes as you receive the payments and have the compounded tax benefit of the money that would have gone directly to pay taxes earning interest for you over many years. You determine when the payments start and how long they will last.

There is a non-profit corporation set up to handle this for you, and the program is flexible enough to be offered through any established 501(c)3 that would like to become involved and receive the donation. There is a bonded and insured independent 3rd party administrator tasked to make the payments, invest the funds and send out the necessary tax documents so the non-profit does not have to have a department set up in house.

As with the Self Directed Installment Sale, if you pass away before receiving all the agreed payments, the remainder passes to your designated beneficiaries. The costs to set up the CIBS are very reasonable, as the non-profit absorbs the legal fees for the bargain sale.

To summarize, the benefits are tax deduction, partial tax forgiveness, tax deferral and the ability to transfer some of those tax dollars to a very worth cause.

For more information and to see if this is the right option for you, contact Paula Straub of Save Gains Tax LLC at 760-917-0858 (8am to 5pm PST) or email Paula at to set up a complimentary consultation.

Wednesday, July 02, 2008

Making the Tax Bill More Bearable When Selling a Business - Option 1

Hopefully, before selling a business, you meet with a CPA or tax accountant and get an estimate on how much of your proceeds will be going directly to Uncle Sam if you pay them in a lump sum at time of sale. You don’t want to save this surprise for after all is said and done, because not only will it most likely be a shock, but you will have given up your chance to do anything about it.

Planning is everything. For this article I will assume you are not doing a 1031 business exchange, that is selling your business and buying another similar business taking into consideration all the IRS guidelines and timelines. It’s pretty rare to see this, but it can defer all of your capital gains tax if done correctly.

Depending on how the business is sold, the gains may be taxed as long term capital gain, short term capital gain, ordinary income, etc. and if you are selling an asset in a C-Corp you may face double taxation. So, the idea is to minimize your tax bill and maximize your proceeds no matter what situation you are in.

One option is with a Self Directed Installment Sale. The structure must be in place before the buy/sell agreement is signed. The gist is to receive the sale proceeds in installments and only pay capital gains tax as you receive the income. This has the effect of allowing the majority of money you would have paid immediately in taxes to continue earning compounded interest for you for many years, thus increasing your bottom line by a significant amount.

The details are a bit too complex to fully outline in a short article, but both an LLC and a Trust are created for you and set up meet IRS criteria for favorable taxation of installment sales. Your asset gets transferred to the LLC prior to sale, and your buyer purchases from your LLC. The trust buys the shares of your LLC from you via an installment agreement and you pay taxes on your gain only as you receive the payments.

You, the seller, are able to control when the payments begin and how long they will be spread out. This allows for maximum flexibility to control your income, and plan for future tax savings as well. Since your buyer paid cash in exchange for your property, you are not dependent on them to make the installment payments and you have transferred the risk of refinance or default. This is done by using an independent third party administrator and your money is safely invested in a principle protected insurance product to be used solely for the purpose of paying the installments.

If you pass on before receiving all of the payments due, the remainder of the installment payments pass to the beneficiaries of your choice.

Seeing an example of a taxed sale vs. a Self Directed Installment Sale side by side will show you how much of a difference in overall return this strategy will provide. This can make the process of the sale more palatable and provide a dependable income stream for retirement.

For more information and to see if this is the right option for you, contact Paula Straub of Save Gains Tax LLC at 760-917-0858 (8am to 5pm PST) or email Paula at to set up a complimentary consultation.

Thursday, June 26, 2008

How To Get the Greatest Return on the Sale of Your Business

If you are thinking about selling, or already have your business up for sale, you don’t want to make any crucial mistakes that will cost you big time.

Most business owners only sell one business in their lifetime. The results of this sale have a major impact on the financial future of the family. You may be an expert in business development, but totally in the dark about most aspects of the best way to sell.

A colleague of mine, Dave Kauppi makes his living helping business owners get the maximum return from their business sales. He has extensive knowledge of the mistakes made by owners attempting to handle the sales process without professional help and can make sure your business is not a victim of unintended financial disaster.

Dave publishes the Exit Strategist Newsletter. It contains a wealth of useful advice to help guide you through your business sale. The subscription is complimentary and I urge you to sign up on his website.

Go to and start learning how to reduce taxes, put together creative deal structures, perform valuations, employ buyer negotiation tactics and much more.

You owe it to yourself to learn how to structure your business sale to your own advantage and have a place to turn when you need some help. Wouldn’t you rather learn from the mistakes of other business sellers instead of being the one to suffer the consequences?

You can also reach Dave directly by calling 630-325-0123 or emailing him at .

Paula Straub
Fill out a Confidential Qualification Questionnaire and see if you qualify to save capital gains tax. Go to

Listen to my weekly radio show “Simply Wealth” at

Wednesday, June 04, 2008

Selling Your Second or Vacation Home

Almost everyone is affected by something happening within the economy today.

Housing prices have taken a dive. Staples such as food and gas are significantly more expensive and still rising. Jobs are being cut throughout many sectors such as construction, education, retail, restaurant, manufacturing, etc. So, the first thing we find ourselves doing is looking to see what we can do without.

I’ve been receiving a lot of calls and emails regarding the sale of second or vacation homes. Once a nice luxury and place to retreat, they are more and more becoming a financial strain, or at least an unnecessary part of life for many.

When selling a vacation or second home, you can’t enjoy the personal exclusion given to primary residences, nor can you qualify for a 1031 exchange available for investment property. Thus, saving on taxes becomes an even more important issue.

If you need to maximize your income, a Self Directed Installment Sale could be an excellent choice. It will basically allow you to receive a steady income stream over the number of years you choose. It also allows for the capital gains tax to be paid back over many years, and compounds the amount of return using the tax amount that would have been paid upfront to earn interest for you going forward.

So, by selling your vacation home and deferring taxes, you have immediate relief from the ongoing expenses of a second property, and additional monthly income to cover the rising costs of life.

Paula Straub
Fill out a Confidential Qualification Questionnaire and see if you qualify to save capital gains tax. Go to

Listen to my weekly radio show “Simply Wealth” at

Wednesday, May 14, 2008

Exciting New Concept in Capital Gains Tax Planning

I'm very excited about a project I have been working on for quite a while that is coming to fruition. I hope to have it available by the beginning of June.

It is a twist on the Charitable Installment Bargain Sale and I hope having this option will be appealing to a lot of people who want to make the world a better place for a deserving group of people.

I've been listening to clients over the last year and one half tell me what they liked and didn't like about the current foundation offering this product.

The three most common hesitations were dealing with a new and untested foundation, not being able to choose to send a part of the donation to their favorite charity, and wondering if the large tax deduction would hold up under IRS scrutiny.

Well, the new program I am helping to launch addresses all of those concerns and will help a cause almost every American will want to contribute to if it fits their overall objectives in selling their asset.

I know this is a tease, but I am very proud of what this will mean to a lot of deserving people.

Stay tuned for upcoming announcements.

Paula Straub
Save Gains Tax

Monday, April 28, 2008

Tax Time is Over - It's Not Too Late To Plan for Next Year

The last few weeks before taxes are due I field a lot of calls from desperate tax payers who sold an asset in the past tax year and now are faced with writing a huge lump sum check to the IRS.

Most knew it was coming, but were not prepared for the amount their accountant just presented them with. It is often double or triple what they expected to pay. Some have no idea where the money will come from because they either spent the proceeds or re-invested into another asset.

The worst news is that it is too late to do anything about it. The event took place in a previous tax calendar year, the proceeds were dispersed and no tax strategy was in place prior to their sale or at least prior to December 31.

This same scenario takes place each and every year and the outcome doesn’t change. The time to start searching for ways to pay less in taxes is before the sale and not months after it has been completed. Human nature is to put things off until the absolute last minute of a deadline and then scramble around in panic to try and salvage a disaster in the making.

The other trend is to find out what options are available and then not take action because it takes too much effort to understand the process and the benefits. It is similar to hiring a Financial Planner to outline a series of steps to start investing for your retirement and then ignoring the plan completely because it’s easier to just spend your whole paycheck rather than putting money aside for your future benefit.

The big picture is often the hardest to comprehend. You may have to feel you are sacrificing a bit now (spreading out the receipt of your gain) versus collecting it all in a lump sum immediately. Instead, you need to see it as achieving a greater amount overall at the end of say 15-20 years.

If you contributed for 30 years to a pension plan at work so you could retire at age 65 would you withdraw 100% of that money the day you retired and pay taxes on all of it at once? Most likely it would never cross your mind. That money is what you will live on during your retirement years.

So why would you want to pay taxes all at once on the sale of your asset and then have to turn around and re-invest what was left over in the same type of safe vehicle that it would be going into anyway with a tax strategy only missing 15-30% of what you would have started with?

As with any investment, it’s not what you make, it’s what you get to keep.

Paula Straub
Fill out a Confidential Qualification Questionnaire and see if you qualify to save capital gains tax. Go to

Listen to my weekly radio show “Simply Wealth” at

Thursday, April 10, 2008

The Risk of Owning Securities

Anyone that has been through a stock market downturn is familiar with the risks of owning stocks, mutual funds, unit investment trusts, Real Estate Investment Trusts, etc.

When values are rising, we pat ourselves or our advisors on the back and congratulate ourselves for making a wise pick. We may even buy more.

The true test of an investor comes when the market heads downwards. Then we second guess ourselves and/or our advisor and wonder if we made a big mistake.

Sometimes, some event out of our control happens and that company we thought was as solid as a rock crumbles out of the blue (Think Bear Stearns, Enron, WorldCom, Tyco, etc.)

Maybe we panic and sell at a loss. Then we curse ourselves for not acting sooner. Hindsight is indeed 20/20.

Any seasoned investor knows that the stock markets go through cycles just like real estate and bonds. One should be in it for the long haul or be prepared to ride a roller coaster.

You might think bonds can never lose value. This is not true.

It depends on the type of bond you own. Some need to be kept through the entire length of the maturity period in order to get what was promised.

Others trade on the open market and can trade at a premium or a discount from face value. Some are backed by more risky collateral and can lose their entire value.

Saving accounts, checking accounts, CDs are safer from loss, but here the lower interest rates also pose the risk of not keeping up with inflation and being worth less in the future than they are today.

Risk is not all bad. Huge profits can be made to those who invest wisely and consistently. Buy stocks when the market is down. They are on sale (assuming the company is still viable of course).

Most of all, remain diversified enough that when the stock market is down, real estate is up, or bonds are trading strong.

Paula Straub
Fill out a Qualification Questionnaire and see if you qualify to save capital gains tax. Go to

Find the “Definitive Beginner’s Guide to Potentially Saving Hundreds of Thousands of Dollars in Capital Gains Tax” at

Wednesday, March 19, 2008

The Risk of Owning Annuities

I’m not sure what you know about annuities, but I will tell you that a lot of insurance agents and registered representatives don’t know as much about the products they sell as they should.

You might wonder how that can be, but if you truly knew the number of annuity products currently being offered by hundreds of companies it wouldn’t be hard to fathom.

The other thing that makes annuities rather intimidating is that since each company’s products have different features and crediting methods they can rarely be compared side by side with much consistency.

The popularity of one over another can actually be the strength of the company offering it and how effectively they market it. Some companies set themselves apart by being truly innovative and others simply get a product out there to have something to offer along with other products.

Some agents are very knowledgeable and know their products inside out. They keep up on changes and take advantage of training seminars and company experts.

Others learn just enough to be dangerous and tell clients what they want to hear and leave out the potential downside.

This has lead to improper products being sold to unknowing prospects, especially in the senior marketplace.

Typically, the main issue has been tying up the funds of the elderly for excessive periods of time when they may need to access this money for issues such as health care or long term care in the short run.

Since bad news gets a lot more press than the products purchased by clients for the right reasons, annuities in general have taken a bad rap and that is a real shame.

There are a lot of good products out there that offer low fees, principle protection, tax deferred growth, good long term interest growth, guaranteed payouts and death benefits.

They make good vehicles for trust investments and for installment sale payments, as they are backed by strong insurance companies who must keep enough cash reserves to guarantee required payouts.

Any trustee or charity that is obligated to make payments to a contracted party needs to invest this money prudently as opposed to trying to hit a home run with an unrealistic return expectation and shouldn’t be subjecting the funds to risky or illiquid assets.

Bottom Line: Annuities for the right purpose are very appropriate and effective. Always make sure you understand what you are investing in and don’t be swayed by headlines- whether positive or negative.

Paula Straub

Fill out a Qualification Questionnaire and see if you qualify to save capital gains tax. Go to

Find the “Definitive Beginner’s Guide to Potentially Saving Hundreds of Thousands of Dollars in Capital Gains Tax” at

The Risk of Owning Real Estate

Real Estate is an important part of anyone’s investment portfolio.

Whether it is the house you reside in, a rental property, vacant land, or a commercial building, a good piece of real estate will almost always increase in value over time.

That said, a number of factors can happen which can affect how much your property increases in value.

Any time you buy a property that is less than desirable, you can lose money. Structural issues you may not be aware of, property in a declining neighborhood, land in a flood zone, natural disasters such as fire, flood, hurricane, earthquake, zoning issues, tax issues, insurance issues, all play a part in the value and profitability of the property.

Economic issues can also have a great effect and are much harder to predict and knowingly avoid.

In 2008 times are tough. People are losing homes and jobs, property values are dropping, companies are going out of business or are seeing major declines in revenue, and a property may not sell as quickly as you’d like.

Even a solid commercial property can have a tenant break a lease and leave the owners temporarily in a negative cash flow position.

Just as I’ve seen my home triple in value in about 5 years, I’ve also seen it decrease by about 20% in 2 years.

This could have gone the other way if I purchased at a different time. It could have gone down significantly in the first couple of years and then rebounded in the next 5.

Real Estate is still a good investment. It is still up to every purchaser to do their due diligence and know what they are buying. It is not a liquid asset, and is almost always more profitably over a 7-10 year period of time.

Those who buy properties to resell at a profit in a short period of time will make a lot of money in some cycles and lose a lot of money in others. It’s the nature of the business.

The moral of the story is, just because real estate can go down as well as up don’t count it out as a good long term investment.

I had a client that did great with a few properties in Florida during the boom there. He sold and immediately bought several more thinking he’d make another huge profit and keep repeating the cycle. Now he is pouring money into empty rentals which aren’t selling and quickly losing his original profits.

Unfortunately, all his eggs are in one basket and he is forced to learn a difficult lesson.

Paula Straub

Fill out a Qualification Questionnaire and see if you qualify to save capital gains tax. Go to

Find the “Definitive Beginner’s Guide to Potentially Saving Hundreds of Thousands of Dollars in Capital Gains Tax” at

No Such Thing as No Risk

We all would like guarantees that any investment we make will never lose money or value. The reality is that every investment has a certain amount of risk.

Whether you are purchasing real estate, stocks, bonds, mutual funds, annuities, gold, or even certificates of deposit there is risk.

The best you can do is evaluate what it is you are purchasing, be aware of the specific risks and potential rewards that asset has associated with it, know what if any recourse is available should something unexpected arise, and do not put all your eggs in the same basket.

We all know the stock market goes up more than it goes down over extended periods of time. Buying good quality stocks of a diversified nature and holding them through both down and up cycles will almost always show long term profit.

Real Estate has similar cycles. If you purchase a good quality property in good condition in a good area it will most likely increase in value over time.

The comparative safety of a certificate of deposit has the risk of locking into a low interest rate for an extended period of time and having your savings not keep up with the rate of inflation.

The next couple of articles will address some of the normal things to expect which can put a crimp in any investors plan. In other words “Stuff Happens” and there is a chance it could happen to you.

It doesn’t mean you should never take risk, just that some risks will pay off right away, and others may encounter some challenges along the way. It is often forces beyond our control that make it hard to predict.

Paula Straub

Fill out a Qualification Questionnaire and see if you qualify to save capital gains tax. Go to

Find the “Definitive Beginner’s Guide to Potentially Saving Hundreds of Thousands of Dollars in Capital Gains Tax” at

Wednesday, March 05, 2008

Life Settlements and Capital Gains

Do you meet the following criteria?

*Age 65 or older
*Have a Life Insurance Policy with a face amount of 250K or more
*There has been a change in insurability since the policy was issued
*Life expectancy of 15 years or less

If so, a life settlement may be something to consider. A life settlement is the sale of a life insurance policy for more than the surrender value while living.

Here are some circumstances that may lend themselves to a life settlement.

*You have a policy that is underperforming and you can no longer afford the premiums to keep it in force.
*You had the policy to protect a spouse who has passed away.
*You have a key employee life policy and that employee no longer is in your employ.
*You have the ability to replace this policy for a policy with the same death benefit and lower premiums.
*The policy was to cover estate tax which is no longer an issue.
*You are considering surrendering the policy or letting a convertible term policy lapse for any reason.

Before you let a policy lapse or surrender it, let over 50 companies compete to offer you significant cash for your policy. Here are a couple of examples of real policy sales.

Male, Age 79, Universal Life Policy with 3.4 million face value and 180K cash surrender value. Policy was purchased for 640K dollars.

Female, age 76, joint survivorship policy, 2 million face value, surrender value of 290K. Policy was purchased for 390K dollars.

Since some of the profits are taxed as capital gain, additional tax strategies can be applied to minimize taxes due.

Contact me if you have a policy that may qualify. We can get an estimate of what fair market value you might expect at no cost to you.

A life settlement may also be effective for exiting a poorly performing variable annuity product.

I’ll be devoting an episode of my radio show “Simply Wealth” to this topic in the near future.

Paula Straub
Fill out a Qualification Questionnaire and see if you qualify to save capital gains tax. Go to

Find the “Definitive Beginner’s Guide to Potentially Saving Hundreds of Thousands of Dollars in Capital Gains Tax” at

Tuesday, March 04, 2008

Having Trouble Selling Your Property? How About Auction?

The biggest thing affecting my clients over the last year or so is that real estate is simply not selling the way it used to.

I can’t even count the number of times that a sale is all wrapped up after months of waiting, and at the last minute it falls out of escrow.

Most times it is due to the financing of the buyer not coming through as planned. In today’s market even “preapprovals” don’t seem to hold a lot of weight.

So although the buyer may lose a deposit, the sale doesn’t happen and the property goes back on the market. It may sit there for any number of months and sometimes the seller is forced to rent it out again just to keep afloat.

If your property is just sitting there with no bites, or you need to sell it sooner rather than later, you might consider putting it up for sale through auction.

I recently devoted a weekly radio show to this topic, and if the idea appeals to you take a listen.

An archive of all of the episodes of “Simply Wealth” is now available on the following website.

Go to the link above and click on the “Listen to My Radio Show- Simply Wealth” link located in the right hand selection menu.

Alternately, listen to the most current show at and even download it as a podcast.

Paula Straub
Fill out a Qualification Questionnaire and see if you qualify to save capital gains tax. Go to

Find the “Definitive Beginner’s Guide to Potentially Saving Hundreds of Thousands of Dollars in Capital Gains Tax” at

Friday, February 29, 2008

When Is a Year and a Day not a Long Term Gain?

I read an interesting article today and had to share.

It’s one of those quirky things that you would probably not ever think about until you got caught in a really awful situation.

By now you know that long term capital gain is taxed at a lower rate than ordinary income, so if you hold an asset for longer than one year you receive a tax advantage when you sell.You actually must hold the asset for at least a year and a day to qualify.

So, something purchased on March 10 of one year could be sold on March 11 of the following tax year and receive long term capital gains treatment.

So when does this rule of thumb not apply?

Leap year, of course.

If you buy shares on February 28 in a year preceding a leap year, and sell them on the following February 29, your gain or loss is short-term, not long-term.

This surprising outcome is the result of a technicality. Your holding period for an asset is deemed to begin on the day after the date of purchase. That's why you can't get a long-term gain when selling on the anniversary of the date of purchase.

If you buy on April 10, your holding period technically begins on April 11. That's why you have to wait until April 11 of the following year to sell for a long-term gain.A purchase on February 28 in a year that isn't a leap year gives you a holding period starting on March 1.

Selling on February 29 the following year may seem good enough because it's a year and a day after the date of purchase. In reality though, you have a holding period that began March 1 and ended February 29 of the following year.

The way these rules work, that's a holding period of exactly one year: not good enough, because you need to hold more than a year to have a long-term capital gain.

I learn something new every day. Hope you did too.

Paula Straub

Fill out a Qualification Questionnaire and see if you qualify to save capital gains tax. Go to

Friday, February 15, 2008

What About Investing in Real Estate Outside of the US?

The US market is pretty shaky right now in real estate. So, what about investing outside the USA?

It may be worth looking into once you know how to do your due diligence and ask the right questions.

This is the topic of the week for my radio show "Simply Wealth". My guests are two experienced overseas investors, Mynette Boykin and Glen Fulton.

The are currently investing in Peru, Mexico, and Viet Nam amongst other countries where the markets are hot.

You can listen over the web at . Click on my name or the show Simply Wealth. You can also download it to your IPOD or mp3 player and take it with you on the road.

Paula Straub

Tuesday, February 05, 2008

The Dish on Finding the Right CPA

This week's guest on my radio show "Simply Wealth" is Diane Kennedy of

Diane is a very well known CPA and tax strategist and author of several books and courses.

An ongoing challenge for a lot of my capital gains clients is finding the right CPA. Even with a tax strategy for a particular asset sale, it is important to know how all the different taxes you may be subject to can affect your bottom line.

Diane uses a statistic from a study that 80% of CPAs don't understand actual tax planning. It is not their focus. Once you own a business or real estate investment, it is very important to have it structured properly and take advantage of all the deductions you are allowed.

It is important to have someone who understands that keeping as much money working for you as possible for as long as possible will increase your wealth.

Never assume because someone took a CPA exam (perhaps many years ago) that they are aware of current rules on more complex tax subjects. A good CPA will know how to research a strategy and be willing to be brought up to speed. A CPA, or other tax professional who is not willing or able to research can do you great disservice.

If you have an internet connection and speakers you can listen to the program on line. Just go to and click on my name or Simply Wealth and you can click on "listen now" or download a podcast if you have an IPOD or mp3 player.

Paula Straub

Monday, January 21, 2008

Simply Wealth Radio Program Debuts Today

My radio program "Simply Wealth" is debuting today, January 21, 2008.

If you have a computer with speakers and an internet connection you can access it by going to and either clicking on "Simply Wealth" from the schedule page or going to hosts, and Paula Straub, and clicking on the link there.

My first guest is Monte Lee-Wen of the PPA Group and and the subject is whether commercial real estate is suffering the same rocky road as residential properties.

The show is also available in podcast form, so if you have an MP3 player, you can download to it and listen while on the road or at your leisure from anywhere.

Be sure to check it out. Next week I talk with guest Jack Guttentag about the mortgage meltdown and what to do if you need a loan or are in one that you can no longer afford.

Paula Straub

Wednesday, January 09, 2008

Your Input Would Be Appreciated

I have been asked to host a new weekly talk radio show which will be debuting January 21, 2008 on

It will be called “Simply Wealth” and will be available on-demand from the website, in podcast form, and soon at many national public libraries in subscription form.

I’m very excited and can use your help to make it the best radio program online.

The show will be focusing on timely topics which will educate and inform listeners on ways to increase, maintain, protect and pass on their personal wealth.

Each week I will interview guests who are experts in their respective fields and I would love you to write and tell me what subjects you would like more information on and that would personally benefit you.

As my subscribers, your needs are very important to me.

Currently, shows will include managing the mortgage meltdown, how commercial real estate is holding up compared to residential, selling your home through auction, how to choose the right CPA, Long Term care for family members and more.

Send any suggestions for topics, any guest speaker recommendations, and any names of potential show sponsors to me at or to my assistant Jessica at

I want this program to help as many people as possible.

Paula Straub

Fill out a Qualification Questionnaire and see if you qualify to save capital gains tax. Go to

Find the “Definitive Beginner’s Guide to Potentially Saving Hundreds of Thousands of Dollars in Capital Gains Tax” at