I dislike doing my taxes as much as anyone else. Mostly because each year I promise myself I will keep better records and not have to sort through piles of paper in order to prepare my return. It always is such a relief to have the process behind me.
I've been getting a ton of questions on my SaveGainsTax website regarding returns. I love to hear from everyone, but must remind you that I am not a licensed tax professional, and I am the last person you want to ask about which IRS form to use and for specific tax return questions. So what is a person to do?
I often refer people to my friend Eva's site taxmama.com She has an "ask" tab there and will try to answer as many questions as possible. Realize however, that during the last days of tax season, she doesn't have time to do anything but her client's returns. Most tax professionals are buried this time of year.
So, it's a good time to think about finding a good professional to give advice on next year's taxes. The time to visit one, or to contact me if you are selling your asset is BEFORE you sell. I'm afraid if the deal is done, you will pay taxes.
Another question I can't answer is exactly how much you will owe in capital gains tax. There are many factors involved and are tied directly to your unique situation and how the asset has been listed on previous returns. I can't stress enough that now is not the time to pinch pennies and attempt to do your return yourself. Contact a qualified tax professional with particular expertise in the type of sale/ asset transfer you had and let them earn their money by perhaps saving you a bunch that you might miss by just not knowing any better. I doubt you want to be audited on a return where you made a critical error.
Have a happy holiday and hopefully a good tax filing. In my book that is any time I can minimize my tax obligation legitimately!
Paula Straub
askpaula@savegainstax.com
Interview With the Pros
Thursday, April 13, 2006
Monday, April 10, 2006
Q&A Can more than one property be placed in a PAT?
I get asked a lot if more than one type of investment can be placed in a Private Annuity Trust.
The answer is yes, if it is constructed properly. When the trust is built, a conversation should be had with the Trust Company and the Trust Advisor and the Legal Counsel, and financial counsel. A thorough analysis should be done as far as other assets, income needs, estate planning needs, timelines, etc.
At that time, the question should be raised as to whether to structure the trust to accept other properties in the future. These could be in the form of real estate, investments, collections, a business sale, etc.
This way, when other assets are sold in the future, another annuity contract can be established, and future income can be increased. Multiple trusts may be cumbersome and cost more over the long haul to set up, maintain and administer. If all can be done within the same trust, logistics are simplified greatly.
Careful planning is key as always. That and choosing knowledgeable professionals and an established Trust Company.
More information on choices is available in the "Interview with the Pros" resource.
Paula Straub
SaveGainsTax
askpaula@savegainstax.com
The answer is yes, if it is constructed properly. When the trust is built, a conversation should be had with the Trust Company and the Trust Advisor and the Legal Counsel, and financial counsel. A thorough analysis should be done as far as other assets, income needs, estate planning needs, timelines, etc.
At that time, the question should be raised as to whether to structure the trust to accept other properties in the future. These could be in the form of real estate, investments, collections, a business sale, etc.
This way, when other assets are sold in the future, another annuity contract can be established, and future income can be increased. Multiple trusts may be cumbersome and cost more over the long haul to set up, maintain and administer. If all can be done within the same trust, logistics are simplified greatly.
Careful planning is key as always. That and choosing knowledgeable professionals and an established Trust Company.
More information on choices is available in the "Interview with the Pros" resource.
Paula Straub
SaveGainsTax
askpaula@savegainstax.com
Tuesday, April 04, 2006
When should you just pay your Capital Gains Tax?
Every day I talk to people who will owe capital gains tax when they sell their asset. It may be a rental property, a stock portfolio, a business, a collectible, etc. They all want to know if there is another option for them rather than writing a check directly on sale to the IRS for the capital gains tax due.
Sometimes, as much as I'd like to help, the only true option is to pay the tax. Now when you hear this, the first reaction is denial. There must be something, right?
If the debt is too high, or the profits too low, it doesn't make sense to pay the fees involved to set up and maintain a trust, and the 1031/TIC option may be out due to not reaching minimum investment level.
If the asset has already by sold and money and title have changed hands, a taxable event has already happened. There are no more options.
About the only way to know if you should just pay your capital gains tax is to have an analysis done and see if there is a better way. At SaveGainsTax you can get started and find out for yourself. The qualification questionnaire is simple to fill out and the response is confidential and timely.
To pay or not to pay will be up to you. Just don't dismiss an option because you aren't familiar with it. Take the time to do a bit of research. Interview with the Pros will save you hundreds of hours of time. The payoff will be well worth it for years to come.
Paula Straub
http://www.savegainstax.com
askpaula@savegainstax.com
Sometimes, as much as I'd like to help, the only true option is to pay the tax. Now when you hear this, the first reaction is denial. There must be something, right?
If the debt is too high, or the profits too low, it doesn't make sense to pay the fees involved to set up and maintain a trust, and the 1031/TIC option may be out due to not reaching minimum investment level.
If the asset has already by sold and money and title have changed hands, a taxable event has already happened. There are no more options.
About the only way to know if you should just pay your capital gains tax is to have an analysis done and see if there is a better way. At SaveGainsTax you can get started and find out for yourself. The qualification questionnaire is simple to fill out and the response is confidential and timely.
To pay or not to pay will be up to you. Just don't dismiss an option because you aren't familiar with it. Take the time to do a bit of research. Interview with the Pros will save you hundreds of hours of time. The payoff will be well worth it for years to come.
Paula Straub
http://www.savegainstax.com
askpaula@savegainstax.com
Tuesday, March 28, 2006
How comfortably will you retire?
Just pick up any newspaper or magazine these days and you'll see how companies are cutting back on benefits. No more pensions, healthcare, etc. We're going to be responsible for our own retirement. I'm not so sure it's really sunk in yet.
My parents lived in the same home for 30 years. My dad worked at the same job for 32 years. They now live a modest, but comfortable life, as they have no mortgage payments, and have a steady income from a pension and social security. Their health benefits are better than mine.
Today, on average, we change jobs and refinance our homes every 3-5 years. The average 401K/IRA will not support a long retirement. I think we're often hoping money will just fall from the sky and take care of us.
My point is, we need to look towards alternative methods of taking what we have and turning it into future income. If you are approaching retirement and have property that has significantly appreciated, or you are selling a business, or have a stock portfolio or collection that you would like to receive benefit from, you will have significant capital gains tax due on sale. You can't afford to give away any more of your proceeds to the IRS than you legally have to.
So, find out about 1031/TIC exchanges, Charitable Remainder Trusts, and Private Annuity Trusts. If they are appropriate for your situation, it could mean the difference of playing golf in retirement or wondering where you're going to get the money to pay for your new prescription not covered under your health plan.
It's never too early to plan for your future.
Paula Straub
SaveGainsTax
Interview With the Pros
My parents lived in the same home for 30 years. My dad worked at the same job for 32 years. They now live a modest, but comfortable life, as they have no mortgage payments, and have a steady income from a pension and social security. Their health benefits are better than mine.
Today, on average, we change jobs and refinance our homes every 3-5 years. The average 401K/IRA will not support a long retirement. I think we're often hoping money will just fall from the sky and take care of us.
My point is, we need to look towards alternative methods of taking what we have and turning it into future income. If you are approaching retirement and have property that has significantly appreciated, or you are selling a business, or have a stock portfolio or collection that you would like to receive benefit from, you will have significant capital gains tax due on sale. You can't afford to give away any more of your proceeds to the IRS than you legally have to.
So, find out about 1031/TIC exchanges, Charitable Remainder Trusts, and Private Annuity Trusts. If they are appropriate for your situation, it could mean the difference of playing golf in retirement or wondering where you're going to get the money to pay for your new prescription not covered under your health plan.
It's never too early to plan for your future.
Paula Straub
SaveGainsTax
Interview With the Pros
Monday, March 20, 2006
Information for Capital Gains Strategies
Each day I get lots of questions posed on my www.savegainstax.com website. I look forward to answering as many as I can.
Very often, however, a question will be something like "My dad is selling an investment property he bought 20 years ago for 10K. It is selling for 500K. Is a Private Annuity trust the best option for him for tax purposes?"
There is no right answer to that question with the information provided. There are too many variables left unanswered. To even begin to know which strategies might be suitable, several other questions have to be answered. Pertinent information would be:
1. Age
2. Marital Status
3. Income needs
4. Estate planning needs
5. amount of current debt
6. depreciation taken
7. how is the property owned? as an individual, joint, tenant in common, partnership, s-corp, c-corp, LLC, etc
8. Purchase year
9. Purchase price
10. Sales Price
11. State of residence
12. State of property
13. Income tax bracket
14. Number of years until retirement
15. any other personal factors that influence decision
Without a complete analysis, there is no way to determine which tax strategy would be the most useful or even possible. If anyone jumps in with a recommendation without gathering all the facts, they are doing you a disservice. All information is completely confidential, but without it any specific reply would be groundless.
Paula Straub
http://www.savegainstax.com
Interview with the Pros
Very often, however, a question will be something like "My dad is selling an investment property he bought 20 years ago for 10K. It is selling for 500K. Is a Private Annuity trust the best option for him for tax purposes?"
There is no right answer to that question with the information provided. There are too many variables left unanswered. To even begin to know which strategies might be suitable, several other questions have to be answered. Pertinent information would be:
1. Age
2. Marital Status
3. Income needs
4. Estate planning needs
5. amount of current debt
6. depreciation taken
7. how is the property owned? as an individual, joint, tenant in common, partnership, s-corp, c-corp, LLC, etc
8. Purchase year
9. Purchase price
10. Sales Price
11. State of residence
12. State of property
13. Income tax bracket
14. Number of years until retirement
15. any other personal factors that influence decision
Without a complete analysis, there is no way to determine which tax strategy would be the most useful or even possible. If anyone jumps in with a recommendation without gathering all the facts, they are doing you a disservice. All information is completely confidential, but without it any specific reply would be groundless.
Paula Straub
http://www.savegainstax.com
Interview with the Pros
Tuesday, March 14, 2006
Interview with the Pros gets good Press
I'm very excited today as the "Interview with the Pros" series is getting national attention.
Here's a link to just one news site announcing the launch.
Site name: Ventura County Star - CA News
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=VENCTYCA.story&STORY=/www/story/03-14-2006/0004319685&EDATE=Mar+14,+2006
This is the first big step in letting people know they may have some great options when selling their capital assets.
I'm hoping the next few blog posts will detail some interesting responses regarding situations that benefit.
Paula Straub
askpaula@savegainstax.com
Here's a link to just one news site announcing the launch.
Site name: Ventura County Star - CA News
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=VENCTYCA.story&STORY=/www/story/03-14-2006/0004319685&EDATE=Mar+14,+2006
This is the first big step in letting people know they may have some great options when selling their capital assets.
I'm hoping the next few blog posts will detail some interesting responses regarding situations that benefit.
Paula Straub
askpaula@savegainstax.com
Tuesday, March 07, 2006
Interview with the Pros revamped
The latest and greatest Interview with the Pros series is now online.
The Qualified Intermediary segment has been revamped with Stephen Wayner from Bayview Financial Exchange Services. Stephen is a renowned expert on 1031 Exchanges and is regularly quoted in major publications.
This collection of information will save tons of time when considering a capital gains saving option. The pros reveal what you need to determine which choice is best.
Go right now to the main site and click under the "Interview with the Pros" box.
Whether you are in escrow or planning ahead for your future, you need to know how others are hanging onto their money.
Paula Straub
askpaula@savegainstax.com
The Qualified Intermediary segment has been revamped with Stephen Wayner from Bayview Financial Exchange Services. Stephen is a renowned expert on 1031 Exchanges and is regularly quoted in major publications.
This collection of information will save tons of time when considering a capital gains saving option. The pros reveal what you need to determine which choice is best.
Go right now to the main site and click under the "Interview with the Pros" box.
Whether you are in escrow or planning ahead for your future, you need to know how others are hanging onto their money.
Paula Straub
askpaula@savegainstax.com
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