Tuesday, December 22, 2009

Happy Holidays!

No matter what faith you observe, I just want to take a minute and wish you a Happy Holiday season.

It's almost impossible to do much business at this time of year, and most emails are answered with "out of office" messages. Who doesn't crave some hard earned time off?

It is my wish for everyone that 2010 ushers in a new era of hope and begins a turnaround for ailing businesses and unemployed individuals who just want to get back to work and support their families.

I'd like to think decent health care will be available to all, but I'm not as encouraged by what I am seeing evolve as new legislation. If only our elected members of both houses would work together in the best interest of the people in this great country instead of pursuing their own selfish ends we might actually create a system that works.

Hope you all have great times with family and friends and that 2010 brings health, wealth and happiness to all those who deserve it.

If you want to help your favorite charity or non-profit provide for their cause, pass them to this link and have them contact me. I'd like to help. Help Your Charity Now

Paula Straub

Friday, December 18, 2009

Tax Nightmares on the Horizon for 2010

With the government bodies embroiled in the health care debate and trying to get something passed by year’s end, they have failed to enact the proper laws to deal with estate tax issues for 2010.

Several options have been brought up for vote, but none have passed both Houses.

So, this leaves us at least for now with there being no estate tax in 2010- which might be good for the families of a few very wealthy individuals who pass away. However, if this happens, thousands of less wealthy families may pay much more in capital gains tax, as the step up in basis for inherited property goes out the window. Not a good trade off for the average middle class.

Several options have been passed around, such as extending the current rule for another year until they have time to give this more attention, increasing the estate tax exclusion and making it permanent, changing the rates at which it is taxed, etc.

Odds are very good something will be enacted sometime next year and be made retroactive to January 1. This opens up all types of lawsuits for people who pass away before the law is passed and would have benefitted from the ruling in place at the time.

One thing I’m fairly certain of is that this will not end particularly well. I swear we elect some really inept people into government who mess up more than they ever fix. Stay tuned for future updates.

Paula Straub

Learn how to help your favorite non-profit by checking out this link:

Thursday, December 10, 2009

You or Your Family Member Needs Assisted Care- Now How Do You Pay For It?

I was asked to write an article for a local publication so I thought I'd pass on the info here as well.

More often than not we prefer not to think of the time we or our family member s will need the assistance of another person or place to help with our physical or mental needs. In our minds it happens to other people but not to us.

However, it does happen and we are rarely prepared. It might be a sudden stroke, the onset of dementia, complications after surgery or a fall, macular degeneration or simply just getting more frail as we naturally age.

Now we have to pay someone to come to our homes, move in with family, move to assisted living or even to a 24 hour care facility. Costs can run from an average of $20/hr for homecare to 3 to 7 thousand or more per month.

A lifetime of savings can disappear in months and a spouse may become impoverished if the other spouse requires extended care. Medicare does not cover many costs of this type and the state welfare program, Medical , only kicks in once your savings are gone- and then your choices are limited home care or a nursing facility of their choice.

So, what are some options to pay for care? Limited space cannot afford much detail, but here are some choices:

· Long Term Care Policies, purchased prior to need, can be worth their weight in gold and well worth the premiums paid. They come in all shapes and sizes and should be geared to your personal situation and budget

· There are now both life insurance policies and annuities that have long term care riders which allow for financial benefits should long term care be needed in the future.

· There are companies that may offer lump sum payments for such things as no longer needed life policies, annuities in payout, and even interests in established CRTs. These don’t apply to everyone, but it pays to know about them in case they do.

· There are some benefits for veterans and surviving spouses under the VA non service connected Improved Pension Benefit with aid and attendance add on.

· If you need to sell assets such as appreciated real estate, there are tax saving strategies that will allow you to keep more of the value of your asset and minimize your tax obligations. These need to be put in place prior to the sale.

· There may be some foundations, churches and charities that provide support services.
· Family members may be able to chip in or you might share some services with a neighbor.

It really helps to do some checking into facilities and home care companies prior to needing them. Scrambling for information when the need is a reality might lead to bad experiences and loss of precious savings. Also, be sure you have a power of attorney document for both medical and financial decisions. Let your preferences be known to those you trust so the decision for your care is not left up to the courts and strangers.

For more information on any of the above, call Paula Straub at 760-917-0858 or email Paula at savegainstax@gmail.com

Thursday, December 03, 2009

How A New Fundraising Strategy Can Help Your Charity

In speaking with a number of charities recently, I notice a big difference between those who have workers that are in it for the cause and those who just subsist in order to collect a paycheck. A bit like politicians, I think, who should be in politics to serve the public but often just serve themselves.

Anyway, in order to find a way to help those who really do want to see their mission succeed, I put up a web page that can provide an overview of the benefits of a new charitable fund raising strategy, watch a recent interview with the developer of it and then contact me if more details are desired.

Here is the link:


Feel free to forward this to any charity you believe can benefit from additional funds. This is not a magic bullet or a cure all for every non-profit, but when it works it works extremely well and everybody wins.

Paula Straub

Friday, November 06, 2009

Do You Support A Worthwhile Cause?

There are so many good Charities and Non-Profits who are really hurting these days because donations are down just when money is most needed.

I have an important favor to ask of you and it won’t cost you a dime.

I want you to email me, fax me or call me with the name of your favorite charity and the contact information for the person who is responsible for fund raising. That’s it.

It can be a school, church, research foundation, animal charity or any legitimate non profit you feel is doing good work and in need of additional donations.

I will invite them personally to a webinar introducing a brand new way to raise significant immediate donations that has no cost to the organization and no net out of pocket cost to the supporter. There are no risky financial tools used.

In all my years of financial planning, I haven’t seen a better win-win situation for both parties when the fit is right.

This will be by invitation only and only open to non-profits. It will take 45 minutes of their time from the comfort of their home or office and they can decide if they want to find out more after attending.

I personally guarantee they have not seen this method before and their time will be well spent.

So, help me help your favorite charity. Feel free to forward this post to anyone who supports a good cause. You can make a difference.

Paula Straub
760-917-0858 phone
866-401-0424 fax

Wednesday, October 07, 2009

Do You Know If You Are Paying Too Much In Taxes?

"It’s not how much you make, but how much you keep." How true.

I specialize in capital gains tax savings but also talk with my clients about how else taxes may be impacting their bottom line. I know they do mine.

Not everyone has a CPA do their taxes. You might do your own, use a software program like Turbo Tax, or take your data to a local tax preparer like H&R Block.

CPAs can be pricey to employ and you may not think you have enough issues to hire one to prepare your returns. However, you may also be missing something that may be costing you money that could be still in your bank account.

I have worked out a deal with a CPA firm I do some work with that you can take advantage of.
For $30.00, a CPA from Gradient Tax Services will do a thorough review of your last year’s tax return. I get no compensation from this offer. It goes directly to them for the review.

They will let you know if you are not taking advantage of any tax breaks you are entitled to, or if there might be a way to reduce future taxes. You may be eligible to amend your return and get money back from last year.

With this economy, we need to keep every penny we’re entitled to.

If you would like to have Gradient review your return, email me your name and telephone contact number and I will tell you the procedure to complete the review.

$30.00 is a minimal amount for a Certified Public Accountant to see if they can save you a heck of a lot more.

Paula Straub

Wednesday, September 30, 2009

More Are Seeing the Light

Thank you for all the emails I received following my last email titled “Lump Sums vs. Income Streams”. It tells me that mindsets are truly beginning to change, mostly due to personal experiences and recent losses.

Just a few situations presented were people getting hit with a large tax bill after the installment sale note they were carrying was terminated due to the buyer selling the property part way into the note term, a person falling prey to a Ponzi scheme and losing a large sum of money, several people who opted for a lump sum after taxes to reinvest and seeing their proceeds further diminish, a person losing most of his life savings after trusting an advisor his attorney recommended, several more who were promised double digit returns and who now have much less than they started with.

It will be difficult to overcome these unfortunate losses.

There is something to be said for a protected and fixed income stream which at least covers your basic expenses. This is the principle pensions and social security benefits were based on.

As you are approaching or are in retirement stages this should be your first priority. This means no matter what else happens, you have money to live on and money you cannot outlive. You need a reasonable (5-7%) annual return (not found in CDs) but this is not money you gamble with. This means not investing in anything that can go down or is subject to changing market conditions.

Once you have the basics covered, you can consider more risky investments if you need a little excitement. Excitement is not all it is cracked up to be when you run out of money!

This is not a new concept, it’s just that we have strayed from the basic rules of protecting ourselves from the very disasters many of us are facing now and in the foreseeable future.

So, if you are selling your appreciated assets, it is prudent to minimize your taxes, protect your principle and provide yourself with a steady income. I am here to help guide you to the best plan for you and your family. Call or email me.

Paula Straub

Tuesday, September 15, 2009

Lump Sum vs. Income Stream

Peter decided to take a lump sum of approximately 500K, pay his capital gains and depreciation recapture of close to 150K and invest the 350K he had left over after the sale of his investment property. Peter was 64.

Peter paid off credit cards and bought some purchases he had been putting off such as a new car and gave some money to his kids and put the remainder into some investments his financial advisor recommended. That was two years ago.

Peter is now out of work and has been selling stocks and mutual funds at a loss to cover his bills. He lost a good deal in value on his investments over the last year. He has about 120K left of that 350K and it is dropping fast.

If Peter had taken a 20 year income stream from a self directed installment sale, he would be receiving about $3500.00 per month or 42K per year for another 18 years. After paying his taxes on this it would still be about $2450. per month he could count on coming in.

If he had simply used this income to pay off his credit cards over the last couple of years he would be out of debt. He may not have the new car or his kids may not have gotten the monetary gifts but he would have an ongoing source of income when he lost his job and would have a means of support going forward if he is unable to find another.

His investments would not have lost value and over the 20 year period he would have received about 110K more using the compounded earning power of the money that went immediately to taxes when he took the lump sum.

Which would you rather have, the lump sum or the income stream?

Paula Straub

Wednesday, September 02, 2009

Is There Any Way Out of a CRT or Other Charitable Trust?

A couple of times of year I get a call from someone who is unhappy with a CRT or other Charitable Trust they are receiving payments from.

Either they no longer like the charity it was set up with, someone (the trustee) has mismanaged funds, they need a lump sum rather than the monthly payments they are receiving or the trust has lost money and they are afraid it will run out short of making the payments due.

Up until now, there haven’t been many options to make any significant changes, but recently I have met with a couple of companies that may have a viable solution. It is definitely worth exploring.

Upon review of your trust, you may be eligible for a cash offer of a lump sum payment in exchange for your future rights to payments from the trust. This lump sum may be taxed at capital gains tax rates versus ordinary income that you have been paying for your monthly check.

Currently, this option was only available to large corporations and investment firms, but now individual cases are being considered.

This can solve an immediate need for long term care expenses, a way to pass more money to heirs, and a way to disengage from a less than desirable situation with the charity.

You may even have an option to spread out the lump sum over a number of years to minimize the taxes if you wish.

If you or someone you know finds themselves in a similar situation, please give me a call to go over your options.

Paula Straub
760-917-0858 or 888-338-3036 toll free

Tuesday, August 25, 2009

When Does A Structured Sale Make Sense?

This is the last of the most common capital gains tax saving strategies. In the last several emails I have covered the SDIS, the Charitable Choices and the 1031 Exchange.

I am going to go out on a limb and make a bold statement about the Structured Sale. I do not see a benefit at all of doing this strategy over the Self Directed Installment Sale.

The SDIS actually is more flexible, returns a higher interest rate and saves much more in tax deferral over time. There is also less resistance from the buyer with the SDIS as they take title and do not have to assign the obligation to make their payments to the seller to an Assignment Company.

About the only plus is a lower initial set up cost and this in no way offsets the lost savings over time. Since the money goes into an immediate fixed annuity which is annuitized to make the installment payments, there are fixed annuities that give guaranteed returns that still return more to the seller over time.

I believe this is why these have not really caught on and other insurance companies have not jumped on the bandwagon to offer their own versions.

If anyone is convinced this is the best option for you, I’d love to hear your reasoning and we can still do a direct comparison. As long as you know the differences, no reason we can’t set one up.

If these reasons closely resemble your desires for the proceeds, or one of the previous options are more to your liking and you have a current sale pending, fill out the Confidential Questionnaire at www.savegainstax.com and I will contact you to discuss further.

Paula Straub

Wednesday, August 19, 2009

When Does a 1031 Exchange or a 1031 Tenant in Common Exchange Make Sense?

Now we have covered the SDIS, the Charitable Choices, and now when does doing a 1031 exchange make sense as a capital gains tax saving option?

* You must have investment real estate or a business that you want to sell and buy another of the same investment type. No primary residences, second or vacation homes, common stock, etc

* You must know the exchange rules and follow them to the letter or know your exchange will be invalid and all taxes due

* You must still have the desire to own new property and manage it

* You know you must carry all of your debt and all of your equity to the new property or the difference is immediately taxable

* You must know you can get new financing in the allotted time if you are transferring debt. Not so easy these days.

* You should be comfortable with the fact that your new investment can gain or lose value over time.

* You have real estate that you wish to leave to your heirs with the least amount of taxes due at your death. Please note here that tax laws may change and this may not be the case when your time comes. Also, even though capital gains tax may not be due, there may still be estate tax issues. I have an awful feeling we will see higher estate taxes or lower caps in the not too distant future to offset some of the US debt we are taking on.

* You may wish to still own real estate and benefit from an income stream but not actively manage it. Here a tenant in common exchange is worth looking into. It goes without saying you need to be aware of all the pros and cons before making a commitment here.

If these reasons closely resemble your desires for the proceeds, and you have a current sale pending, fill out the Confidential Questionnaire at www.savegainstax.com and I will contact you to discuss further.

Paula Straub

Tuesday, August 11, 2009

When Does a Charitable Remainder Trust, Charitable Gift Annuity, CRUT, CRAT, CLT, etc. Make Sense?

I’ve talked about the Self Directed Installment Sale and the Charitable Installment Bargain Sale, so now I’ll characterize when the other charitable options may make sense as capital gains tax saving strategies

* You have a charity that you want to support by giving away a good portion of your proceeds from an asset sale either now or after your death

* You need a large tax deduction to offset ordinary income

* Your heirs have been taken care of by the fact they will inherit other assets or you have adequate life insurance from which they will receive the proceeds

* You would rather see the charity receive the proceeds rather than the IRS via taxes due on sale

* You have highly appreciated assets with very low cost basis which gives you a larger tax deduction upfront and you have a large income from other sources or sales

* Your income from other sources does not depend on the sales proceeds to fund your retirement

* You feel an income stream is more beneficial to a family member than gifting them with the asset or lump sum, as they may spend the bulk and run out of money prematurely.

If these reasons closely resemble your desires for the proceeds, and you have a current sale pending, fill out the Confidential Questionnaire at www.savegainstax.com and I will contact you to discuss further.

Paula Straub

Monday, August 03, 2009

This Blog on WE Magazine List of Women Bloggers to Watch in 2009

I was really thrilled to be notified that I am on WE Magazines "Women Bloggers to Watch in 2009" list.

I've been doing this blog since 2005 to educate on capital gains tax savings and it's nice to be noticed as a quality website.

Here's a link to the article


Thanks WE magazine!

Paula Straub

Friday, July 31, 2009

Beginner's Teleclass Now Available On Demand

I am no longer doing regular live telecalls to educate on the ABCs of Capital Gains Tax Saving Strategies.

The good news is, that I have just made an immediate download available so that you can listen through your computer speakers whenever it's convenient.

You can sign up for access (it's free) and you will be able to download the cheatsheet, listen in on the call and make an appointment to have all your questions answered if you wish afterwards.

Isn't technology great?

Go right now to www.savegainstax.com and get these crucial fundamentals.

Paula Straub

When Does a Charitable Installment Bargain Sale Make Sense?

The last email discussed the SDIS and when it is a strategy to consider. Now I’ll list a few characteristics of the CIBS or Charitable Installment Bargain Sale and when it may be applicable for your situation.

* You have a charity that you want to contribute a portion of your sale proceeds to in order to support their cause. This is the single most important reason as it is with all the charitable strategies

* Your charity is willing and able to take on the responsibility and the obligation of handling the asset sale and setting up their own administration for making the installment payments to you over the time agreed

* Your charity is well established and a valid and well funded 501(C)3 in good standing
Your charity will protect your portion of the proceeds preferably separate from their general accounts in an investment that has principle protection to avoid future loss

* You have need of a large tax deduction to offset ordinary income and you realize the limitations of the IRS for annual maximum deductions

* You want to control the amount going to charity and be assured of the amount being returned over time

* You want to be able to spread out the repayment of the remainder of the taxes due over time and create an income stream for yourself.

If these reasons closely resemble your desires for the proceeds, and you have a current sale pending, fill out the Confidential Questionnaire at http://www.savegainstax.com/ and I will contact you to discuss further.

Paula Straub

Tuesday, July 28, 2009

When Does a Self Directed Installment Sale Make Sense?

How do you know which capital gains tax saving strategy to choose when you don’t know much about any of them?

The next couple of emails will talk about when a particular strategy might make sense. You may or may not recognize your own situation because there is never one size fits all but I’m hoping getting down to basics might shine a little light on the subject.

Here are some reasons to consider a Self Directed Installment Sale

* Your desire is to maximize the amount of return over time to you and your family and a 1031 exchange is not a good or possible option for you

* You desire the maximum amount of flexibility in setting up how you receive an income stream

* You are looking for safety of return, a decent interest rate and a dependable income for a fixed amount of time

* You want the possibility of being able to cancel the income and take a remaining lump sum without major consequences in the future in case of unforeseen circumstances or emergency need

* You have no major wish to give a portion of your proceeds to charity- your family and heirs are most important

* You may have reason to defer taking any income for up to 10 years and wish to maximize future income for when you do retire and defer paying the bulk of the capital gain until a later date

* You don’t need a tax deduction to offset higher ordinary income tax rates in the year of sale

If some of the above reflect your needs, and you have a current sale pending, fill out the Confidential Questionnaire at www.savegainstax.com and I will contact you to discuss further.

Paula Straub

Thursday, July 09, 2009

Is The Capital Gains Tax Rate Going UP?

For years now, CPAs, financial advisors, realtors, etc. have been telling their clients to sell their assets now because capital gains tax is at the lowest it has been in years.

This is true, and in some cases a wise move. However, these advisors usually have some personal interest in having you sell your assets such as a sales commission, another place to put the funds to make them money or simply because they don’t know there may be another way that would save you money.

Typically, if the asset is valued under 100K I tend to agree. Especially if you live in a state with no capital gains tax or are in a very low income bracket.

Will capital gains tax rates be going up? Probably, and probably in the not too distant future. We Americans will have to pay for all this money our government is doling out to the big companies and banks, etc. Not that they are sharing it or helping the average Joe as they promised, but don’t get me started down that road….

However, there is an argument to be made for deferring tax or spreading out the payment of tax even if the tax rates rise. Here are the main reasons why.

1. If you can earn interest on money you would have had to pay all at once up front you usually still make out even if tax rates rise.

2. If tax rates go up, interest rates usually go up as well

3. Tax rates go up and tax rates come down over long periods of time. You pay them as you receive them, so you will pay higher rates in some years and lower rates in others, but you are only paying on a portion of each installment.

4. When you pay in a lump sum and invest the remainder, it takes a very long time just to get back to where you started and in most cases you still have to deal with taxes on interest or dividends which is taxed at an even higher rate.

5. People in general tend to manage money better when it comes as an income stream and not as a lump sum. Just look at lottery winners and sports stars.

Don’t just look at one factor, such as the current capital gains tax rate to make your decision when selling an asset. You need to look at your entire financial picture, your present and future needs, and plan for the overall best outcome.

Also, don’t rely only on the person who stands to gain from your selling and paying upfront. If the rates go up, their advice will be the same, though probably with a different rationale. That is how they make their living.

Paula Straub

Friday, July 03, 2009

Who Can You Trust With Your Money?

Even during good times it is hard to trust another person or company with your hard earned money. What if you get taken?

This past year has only added to the fear with crooks like Madoff, Stanford and numerous other con men and women literally stealing the life savings of innocent people, charities and pension funds.

Yes, you can stuff your cash in a mattress or personal safe to physically guard it, but let’s face it, there’s got to be a better way. It’s a bit like identity theft. There are standard and common sense precautions to take that work 99% of the time and there is always that 1% that is unavoidable and unpredictable but necessary for us to prosper.

I’ve put together some basic rules that it makes sense to follow.

*Know what it is you own. Whether it is a CD, a stock, an annuity, real property, a mutual fund, etc. you should have a document of purchase and it should be traceable.

* Beware of writing a check to an individual who is investing your money. This is how many crooks take advantage. They cash the check because it is made out to them personally and never invest it where they said they would.

* Don’t invest in something you don’t understand.

* Most investments should be in vehicles that are regulated by the state and or federal government. Stocks, mutual funds, annuities, real estate are all examples.Be cautious of giving money to a person or company that tells you they will give you unusually high returns on an investment you can’t track the value of or that is unsecured by some sort of collateral.

* Be aware if your investment is in anything except some insurance products, annuities and CDs with guarantees you can and often will lose value as well as receive gains.

The moral of this story is not to be afraid, but to be cautiously optimistic and educated on where you put your hard earned gains and savings. If we learn nothing else from this rotten economy, it should be that prudence should outweigh greed.

Paula Straub

Tuesday, June 09, 2009

Attention Seniors With Diabetes, Arthritis and/or Mobility Issues

If you are over age 65, and have Medicare Parts A and B, and are not currently part of an HMO, you may be eligible for free medical supplies.

Examples are a diabetic testing meter that does not require pricking your finger, elastic support braces, electric scooters and a hot/cold compression wrap to reduce swelling.

Go to the following link to see the options available, and if you feel you can benefit send me an email to savegainstax@gmail.com with your name and phone number. If you qualify, the devices are delivered to you at no charge.


Be patient for the file to appear, as it takes a bit of time to load on your screen.

Please feel free to pass this email to someone you know if you feel they can use any of these products.

My Mom loves her new testing meter.

In this economy, every little bit of savings count!

Paula Straub

Wednesday, June 03, 2009

Another Potential Hidden Source of Income

There may be some “green shoots” of hope forming in parts of the economy but we are still subject to a long period of uncertainty. I am always looking for ways to pass on little known options for the right situation where someone might benefit.

I’ve talked about life settlements and veteran’s pension benefits and today want to mention annuity purchases. Here are a couple of examples.

1. You bought an annuity years ago and are now receiving payments from this annuity over a number of years, let’s say 20. You set this up for a guaranteed income stream to get you through retirement. Now it is year 5 and you are faced with a serious life crisis. For whatever reason, you need a lump sum of money but don’t have other resources. It is possible that a company who purchases annuity payments can look over your policy and make a cash offer in exchange for your future payments. This may be also possible on a partial amount. If this makes sense for you, it opens a new window to solve a pressing problem.

2. You had an accident or perhaps a medical claim that was settled in the past and you chose payments over a specific number of years versus a lump sum payout. At the time this seemed the prudent thing to do, but again, life interferes and you need access to a larger sum of funds. There may be a company who will make an offer as in example one that will allow you access to funds that you did not have before.

I have access to these companies, so if you are in a similar situation, or know someone else who is, please give me a call at (760)917-0858 or (888)338-3036.

It helps to know as many options as possible, because we are all having to be creative financially in this volatile times and knowing where to turn for help is the first important step.

In the next email, I’m going to explain how certain people can get access to free medical supplies such as new diabetic testers, braces for arthritis, and electric scooters.

Paula Straub

Friday, May 15, 2009

The Document Everyone Should Have on File

While waiting for the credit markets to loosen up so my clients can actually sell their real estate and businesses, I have been spending a lot of time with veterans, widows and their families.

As I have mentioned before, many who are now in need of daily medical and personal assistance can qualify for the Veterans Improved Pension benefit with Aid and Attendance Add-on. It is a life saver for those whose savings are being eaten up by care bills and also those adult children caregivers who perhaps have quit a job to care for Mom or Dad and now find themselves in a financial bind.

Perhaps one of the major road blocks I have consistently seen is an elderly person with dementia or Alzheimer disease, or perhaps now disabled from a stroke who did not sign over durable power of attorney to someone prior to becoming physically or medically disabled. Now it is too late and a family member must go to court to get custodianship and ask permission from the court before making financial or medical decisions on their behalf.

This can be very time consuming and expensive and is easily avoidable.

It does not matter if you are 30 or 80, you need to put a plan in action to give a chosen person power of attorney in the event of your physical or mental incapacity. Name contingent designees in case a spouse might precede you in death. The power of attorney should be for both financial and medical decisions.

Just having this document notarized and on file where someone can access it in time of need can mean the difference of being taken care of the way you want and having everyone hands tied so they can not help get your affairs in order when necessary.

An attorney is not necessary to implement this document. Templates can be downloaded online and you can write in your exact wishes and when the document becomes in effect.

Please take a moment and do this now. Tell your family and friends to do the same. Take it from those who wish this had been done and whose hands are now tied because they can’t access the funds of the incapacitated individual or make the medical decisions necessary for their care and well being without a court ruling.

Paula Straub
760-917-0858 M-F 8am to 5pm Pacific
www.gbausa.org/pstraub (More info on VA benefits)

Monday, April 13, 2009

Answers to Most Common Questions from VA Benefit Post

I’ve been receiving many questions from my last post, so I am going to attempt to answer the most common questions. If you have others, please contact me directly.

Q: What exactly is this pension and who qualifies?

A: Here are the mandatory qualifications for what is known as the Veterans Improved Pension Benefit. This is a non-service connected pension benefit with additional add-ons of “housebound” and “aid and attendance” benefits available to a veteran or their widow(er) who requires the assistance of another person in order to avoid the hazards of his or her daily environment. This is not to be confused with a service related disability pension which falls under a different program. The veteran must also have:
a. 90 days of consecutive active duty service, one of which was during wartime.
b. Any discharge other then a dishonorable discharge
c. Be 100% disabled or at least age 65
d. There are income and asset limitations which can be discussed individually

Q: How do I know if I qualify?

A: Go to http://www.gbausa.org/pstraub and fill out the qualification form. It comes directly to me and no one else and I can contact you to discuss your qualification.

Q: I already applied and was turned down. What can I do now?

A: Once you have submitted the application, and if it was done incorrectly or lacking the proper documentation, it is pretty difficult to overturn the decision. This is why it is crucial to do everything right before the initial submittal.

Q: I have a Veteran’s Service Officer helping me. Do they perform the same service you are providing?

A: The Veteran’s Service Officer at the local VFW or American Legion is trained to fill out the paperwork for submittal. They are not trained or able to offer suggestions of what options you have to be in a position to qualify at a later date, and may tell you that you do not currently qualify and to come back once your income or assets have been depleted. It makes their job easier if everything is in order so they can review the application prior to submittal and make sure everything is in order for processing. Since you only get one first shot at success, it pays to have all your ducks in a row so you are approved on the first go around. Since neither myself nor the VA Service officer charge for this service, why not cover all your bases for optimum success? We both want you to qualify to receive the benefit you have earned.

Q: How long does it take to qualify and begin receiving the benefit?

A: The VA can take 4-6 months to approve the benefit, just due to backlog and understaffing. However, the benefit is retroactive to the 1st of the month following application receipt, so the sooner the better as far as applying. If assets need to be transferred, this may take additional time depending on the individual situation.

Q: Do you have to be “poor” to qualify?

A: No. To get only the basic pension without any need of medical assistance, such as driving, taking medication, walking, bathing, etc, you do have to have a very low income and this may not be the right time to apply. Once you start needing ongoing care, the medical bills can be substantial, and this is when the program can really help defray the costs of home care, assisted living, or nursing care. This is the true value of this benefit.

Q: Is this applicable to the spouse of a veteran?

A: Although the aid and attendance benefit is for the veteran or the widow(er) of the veteran, it still may assist the couple when either needs care. This is because both the husband and wife’s income counts towards qualification, so do the medical costs of both the husband and wife count towards qualification.

Q: If a widow(er) of a veteran remarries, do they still qualify for the benefit?

A: No. The VA only counts the most recent marriage for the widow(er).

Q: Does care provided in the home count for qualification?

A: Yes, see me for details.

Q: What if a child is caring for the veteran at home?

A: The care does not have to be provided by a licensed care giver as in long term care policies. See me for details.

Q: Can a veteran get both a service related pension benefit and a non-service related benefit?

A: Not both at the same time. Whichever pays the higher amount would be the one to go with.

Q: Does this amount stay the same year after year?

A: The amounts are increased annually. You must also re-qualify each year, which is pretty straight forward unless you receive additional income or no longer need assistance.

The bottom line is if you know of someone who may qualify, it is worth it to check it out. With the rising cost of health care, the increase in life expectancy and the risk of outliving income and savings, every penny counts and this benefit is free of dreaded TAXES!

Paula Straub
888-338-3036 toll free

Tuesday, April 07, 2009

Important Info for Veterans Over 65 Using Assisted Living Services

In doing research for my own family member, I came across extremely valuable information for US Veterans that might make a huge financial difference in their lives and the lives of their spouses and children.

If you are, or know of, a Veteran or Widow(er) of a Veteran over age 65 in need of medical assistance for daily living, whether at home, in an Assisted Living Facility or in a Nursing Facility, you need to know if you (or they) qualify for the Veterans NSC Improved Pension Benefit.


This assistance is a little known benefit of tax free pension income from our Government to Veterans who served during any period of war, even if they did not go into battle and it can truly be a life saver.

I recently went through a training program to educate people on this benefit and have set up a web page with additional information and resources. I also have a toll free phone line for questions and contact.


It doesn’t matter which state you reside in. I will let you know if I can help, or I will try and direct you to a person in your area.

There is no charge for this service and I urge you to use it. Even if you think you or your family member or friend will not qualify, this may not be the case. The maximum benefit for 2009 is $23,396.00 per year and is TAX Free!

Go to this web link and find out more.


Paula Straub

Tuesday, March 31, 2009

Good Intentions, Bad Tax Consequences

As we step in to take care of aging friends, parents and grandparents, we can make choices which seem like a good idea at the time, but turn out to be not so desirable when it comes time to sell.

I’ve gotten several questions lately about the tax consequences after selling a home that was either gifted or sold for a very low price prior to death, typically to a child of a sick or ailing relative.

The idea was that the owner was either too sick or unable to take care of their residence and a child stepped into getting control of the assets so they could make the financial decisions to care for the seller.

Since they didn’t want to pay the seller out of pocket, the property was gifted with a quit claim or grant deed or sold on paper for $1. or other low amount. No taxes were due, and now the responsible party was in control. Note: this doesn’t work for planning for state or federal aid unless done at least 5 years prior to need or request.

Then, once the parent or seller is taken care of or has passed on the property is sold for market value. It is at this time that the real consequences surface.

To make a long story short, the new seller now has a large tax bill with capital gains tax levied on the amount over cost basis for the sale. The cost basis is either the $1 paid or the previous owner’s cost basis if gifted. This can be a huge amount depending on value.

If the original owner had retained title, the house could have been sold and the personal exclusion for primary residence applied if they still satisfied the ownership and residence tests, or would have passed to the beneficiary at market value as of date of death.

The child could have gotten legal power of attorney and handled this for the original owner if incapacitated.

Before making any major decisions, be sure to meet with a good attorney who will explain all the pros and cons.

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

Tuesday, March 24, 2009

Simply Wealth On Hiatus

I’ve really enjoyed being the host of Simply Wealth on WebTalkRadio over the past 15 months, and wanted to let you know I’m taking a break to concentrate on exciting new ventures.

Anyone who has hosted a weekly radio show will appreciate the amount of time and effort that goes into preparing, taping, editing, uploading, etc. I developed a regular following of about 30K listeners on a weekly basis and appreciate all who faithfully tuned in.

I will keep my radio email open for any general questions on financial matters and try to keep up with replying as time allows. This address is SimplyWealthShow@gmail.com . You can also listen to my archived shows at www.savegains.com by clicking on the link to “Listen to My Radio Show Simply Wealth”.

You can also follow me on Twitter. My name there is @savegainstax . This is a whole new concept for me which allows short updates of new developments and interesting tidbits.

While waiting for the credit markets to unfreeze, stay tuned for info on some local seminars I will be offering which will really benefit certain deserving individuals. More info to follow.

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

Wednesday, March 18, 2009

Safety Has Once Again Risen To the Forefront- Thank Goodness!

It was less than a year ago that clients were willing to forsake safety and a steady return for the chance to “make it big” with gas and oil, REITs, real estate and other volatile investments.

They decided to pay all their capital gains tax and depreciation recapture up front so they could invest their hard earned proceeds – often with the help of money managers- to not only get back where they started from before taxes, but to soar ahead of a measly 6% return and tax deferral.

Why put money into principle protected products that don’t lose in bad markets and gain only a portion of the growth that stock indexes make in good times? How boring!

Do you know anyone who has lost a LOT of money in the market this year, in gas and oil, in real estate, in a business? I do. I have taken a beating in my own retirement plans.

The people I know who are the happiest are the ones that opted for the boring equity indexed annuity and who have experienced zero loss and an income stream that pays the monthly expenses. When the market does come back, and it will eventually, they will start where they left off and not have to dig out of any holes going forward.

It takes a crisis like the one we are in to appreciate slow and steady versus quick and uncertain. Now when I get calls, the first thing I’m asked is how will they be assured their principle is protected?

If I look back to my parent’s generation, who worked and saved rather than borrowed and spent, we have come full circle. I think it’s a much better way to go.

How about you?

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

Thursday, March 12, 2009

A Sad, But All Too Common Story

In past years, the most common situation was people nearing retirement often came to a decision to sell real estate or businesses which had appreciated in value, had a low cost basis and little debt. This left a big gain and a huge tax bill.

There are still many great choices for deferring or spreading out taxes over long periods of time and setting up a solid income stream for retirement if this is the case.

With this crazy economy, more and more upside down situations are becoming all too common place. Here is one scenario which has many variations, but the same dire consequences.

Phil bought a commercial property 16 years ago for 500K. As it appreciated in value, he took out equity to make other investments, pay bills and buy a few luxuries. His debt increased to 800 as the property value reached 1 million.

Then the market came tumbling down and the property is now worth 750K and he wants to sell. He will only clear about 700K after normal costs of sale. He called to ask how he can minimize his taxes.

Phil is in a world of hurt with no good way out. Not only would he have to come up with 100K out of pocket to pay off the loan to the lender, he is on the hook to the IRS for 400K in capital gains and depreciation recapture, which will work out to about 120K in taxes due.

So, to sell now, he will owe approximately 220K out of pocket to the bank and the IRS and he will have zero proceeds from the sale. Phil was hoping I would have a solution for him to defer paying his taxes. Bankruptcy came to mind.

The thing Phil was oblivious to was that he had had use of 300K equity for many years, but had not reinvested it into his property, and spent it elsewhere. He had assumed the property value would continue to increase and never go down. Now he’s pretty much up a creek without a paddle.

Since Phil does not have the money he needs, he may not be able to sell at current market value. The lender would have to ok a short sale, and then he would have to declare the 100K as income because it is forgiveness of debt and there is no break for investment property. He would still owe the 120K to the IRS. There is no way he can pay all his tax and mortgage obligations, as he has no savings.

The bottom line is, Phil is in trouble and if he can’t hold onto the property he will have to look into bankruptcy or insolvency. There are currently many in the same boat and there is no good way out. I hope Phil can hang on until the market rebounds at least enough to cover his taxes because I hate to see anyone lose everything they’ve worked for.

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 www.webtalkradio.net

Tuesday, March 03, 2009

How Bill Saved $240,981 Using a Self Directed Installment Sale

Bill owned an investment property that had appreciated a lot in value. He had depreciated it completely over the years.

Bill’s adjusted cost basis was $0. His straight line depreciation was 200K. The selling price after closing costs was 1.2 million. His gain is 1.2 million and of that 200K is taxed at depreciation recapture rates, and 1 million is taxed as capital gain.

Bill is 62 years old and lives in Utah where capital gains are taxed at 5%.

Bill did not want to do a 1031 exchange and wanted the maximum amount of proceeds to be kept in his family. A Self Directed Installment Sale was his vehicle of choice.

If Bill had sold and paid all taxes upfront, he would have owed about 264K in taxes.

By structuring the sale correctly, Bill chose a 25 year payout so it would most likely last him the rest of his life. He is single and has one son who is financially sound.

By spreading out the repayment of capital gains and depreciation recapture over 25 years, Bill was able to recognize a savings of approximately 241K .

Assuming Bill paid his taxes, invested the proceeds at 6% interest and took withdrawals to live on over a 25 year period, his annual income would be approximately $73,056.00 per year.

By deferring and spreading out the tax repayment over 25 years and assuming that the proceeds are also invested at 6% during the payout phase, his annual income is $93,661.00 per year.

In these crazy times, can you use the extra income, or do you prefer to give it to the IRS?
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 www.webtalkradio.net

Tuesday, February 24, 2009

How Painful Has This Year Been For You?

I don’t know about you, but this past year has been a real “bear” in more ways than one!

Not long ago, the calls and emails I received were primarily from relatively happy individuals who had found a buyer for their appreciated real estate, businesses, etc. and were looking to minimize their capital gains taxes.

Fast forward to today. More and more calls and emails are from people who
have been trying to sell their assets for a very long time, and few are having any success. Here are the most common dilemmas:

They are getting low-balled on the offers that do come in and are determined to wait for the values to go back up

They are getting close to losing the properties because tenants have pulled out, they are behind on mortgage payments, or buyers offers are dependent on the sale of another property

The most common is that buyers, even though they are supposedly prequalified for loans, are unable to get the loans, and this is happening right up to the day of close.

The saddest calls of all are from investors who have had to go through short sales on investment properties they bought at the top of the market and now are finding out that they owe income tax on the amount of debt forgiven by the lender. In some cases, this amounts to tens or hundreds of thousands of dollars which the person does not have, and they face possible bankruptcy or insolvency.

As much as I’d like to help with these things, when you aren’t able to sell at a profit, I have no tax strategy to help save on your tax bill. I sure wish I did, because I’d be the most popular person around. Until credit frees up, real estate prices stabilize and confidence is restored we are all pretty much at a standstill and it stinks.

Just realize, if any of the situations above are similar to yours, you are in very good company. Let’s hope all these stimulus packages using our tax dollars have the desired effect. Personally, I can’t wait for the day to get happy calls again!

If you do have a cash buyer that makes even close to a reasonable offer, think real hard before turning them away. They are far and few between and it will be a good while before it is once again a sellers market.

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 www.webtalkradio.net

Tuesday, February 10, 2009

Tips For Getting Through Tough Times #2

The last email talked about the possibility of getting a cash offer for a life insurance contract that was no longer needed, expiring, and/or affordable.

Here is another potential source of lump sum value for an annuity contract in the payout phase. Potential individuals who may benefit are those
Whose payments are not providing enough to live on
Who are receiving payments tied to an extremely low interest rate
Whose health has changed and the need for additional money is great
Who have inherited an annuity and are forced to take the balance as a payment stream when a lump sum is more valuable to them.

If you or anyone you know is in this situation please email me or give me a call. I can let you know if a company is willing to make an offer for consideration.

Not all policies will qualify, but if yours does it may mean that you have the ability to access money you did not think you had and cover whatever expenses are at hand. There is no obligation to accept any offer made.

If you have any questions don’t hesitate to call or pass this email to someone who might benefit.

Paula Straub
M-F 8am-5pm PST

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 www.webtalkradio.net

Wednesday, February 04, 2009

Tips to Getting Through Tough Times #1

I don’t have to tell you that our current economic turmoil is affecting our lives in ways it didn’t seem possible even one year ago.

Many of the emails and questionnaires I receive on a regular basis are relating to people selling assets at fire sale prices, being foreclosed on, and being stuck in perpetual hold mode due to the lack of credit available to potential buyers.

Worse yet, property values continue to decline, as do assets in stocks, IRAs, variable annuities, life contracts, etc.

The next series of emails will be focused on finding potential sources of income from assets you may own but may be unaware they have additional value.

Even if these options do not apply to you, you may know of someone who can benefit and share this information with them. We are all in this situation together.

First is potential value in a life insurance policy that could provide a substantial lump sum payment in times of need.

If you or someone you know over age 65 is considering dropping or surrendering a life insurance policy because it is no longer needed or if the payments have become too much of a burden to maintain, please have them contact me.

Even if the policy is a term policy with no cash value, there may be value to an investment company who may make a substantial cash offer on a policy that would have been dropped anyway. These companies buy policies and package them in large groups which are resold to investors. There is no single owner with a vested interest in the seller passing on early so this makes it more palpable to the seller.

This is especially valuable to seniors who are afraid they don’t have enough savings to last through their retirement, those who have an unexpected medical or financial setback or those who have no heirs that need the death benefit. It is also a way for their children to have enough resources to take care of them should they need long term care and have no insurance for that. In some cases, additional life insurance can still be purchased with the proceeds.

The policy owner has complete control on whether or not to accept the offer. Not all policies qualify, but I can let you know if yours does when I get some basic information. It never hurts to cover all the bases.

Paula Straub
760-917-0858 M-F 8am to 5pm PST
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 http://www.webtalkradio.net/

Monday, January 12, 2009

TIC Properties in Today's Real Estate Market

We all know that real estate goes up and down in value. Just like stocks, more years are up than down but occasionally we get a market such as the one we are in where it seems all investments are taking a big hit.

So, what is the state of the tenant in common market today? It depends.

It depends on what type of property you own, where it is located, and when you purchased it. Here are some of the factors involved.

Some of the most common types of tenant in common properties consist of shopping centers, office buildings, medical buildings, senior and assisted living and apartments. Most are at least 95% rented when originally purchased.

For years, when real estate values were climbing and the economy going strong, most properties met their expectations and paid out the proceeds as planned.

Now look at what is happening nationwide. Retail businesses are closing and leases are being broken. Large and small service businesses are also shutting down due to the economy. Some parts of the country are worse than others but we see job losses occurring every day. This is not the buildings or managements fault. It is part of being an owner of real estate. It wouldn’t matter if you owned the whole building or a part of it. This will disrupt your profits and income.

Many apartments are doing very well. People losing homes have to live somewhere and often fill up rentals. On the other hand, if your apartment complex is mostly filled with workers from a particular company and if that company is laying off in droves this could affect vacancy rates.

Most senior living and medical buildings are faring well. There is no shortage of aging seniors or people needing medical care. Of course more and more people are losing medical insurance so we may see this have an effect as time goes on unless we get some sort of universal health care open to all.

Commercial property is starting to slide in value and there are more and better deals to be had. The hardest part now for TIC Sponsors is getting the financing to make the purchase and allow exchangers financing in place. It is also difficult to refinance the initial loans that are resetting if the property was purchased 5-10 years ago. Again, this is true for anyone owning real estate and simply part of the risk involved.

The bottom line is that some TICs are underperforming, and some are doing well. There are great opportunities coming along when credit begins to free up. Things will get better, but some values may fall due to unforeseen events beyond our control. Owning real estate means owning the ups and downs of fluctuating markets. Just like any investment, never put all your eggs in one basket and be prepared to weather the storm. This too shall pass.

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 www.webtalkradio.net