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
760-917-0858
savegainstax@gmail.com
Wednesday, August 19, 2009
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
760-917-0858
savegainstax@gmail.com
* 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
760-917-0858
savegainstax@gmail.com
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
http://wemagazineforwomen.com/100-more-women-bloggers-to-watch-for-2009/
Thanks WE magazine!
Paula Straub
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
http://wemagazineforwomen.com/100-more-women-bloggers-to-watch-for-2009/
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
savegainstax@gmail.com
760-917-0858
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
savegainstax@gmail.com
760-917-0858
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
760-917-0858
savegainstax@gmail.com
* 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
760-917-0858
savegainstax@gmail.com
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
760-917-0858
savegainstax@gmail.com
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
760-917-0858
savegainstax@gmail.com
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
www.savegainstax.com
760-917-0858
savegainstax@gmail.com
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
www.savegainstax.com
760-917-0858
savegainstax@gmail.com
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