Just back from a business trip where lots got done and set into motion. It's going to be an exciting second half of the year.
Our government just extended the lower capital gains tax rates for another 2 years. See link:
http://www.cnn.com/2006/POLITICS/05/10/house.tax/index.html?section=cnn_latest
They added a bit to the limits to avoid the dreaded Alternative Minimum Tax, but a lot of people will be still be caught in that trap. Let's hope they eliminate it all together one of these years!
I'll be back on track starting next week. Have a new website with free report available here.
Happy Mother's Day to all you moms. My mom will be visiting from Florida this year.
Paula Straub
SaveGainsTax
760-917-0858
Thursday, May 11, 2006
Thursday, April 27, 2006
Another scenario for 1031/TIC Exchanges
The trick is always in the planning. Sometimes you can have your cake and eat it too.
In helping a client determine what the best strategy was for them, a couple of things came into play. They had land that had really appreciated that they had owned for about 10 years and they wanted to sell. The sale price was about 800K (gains 700K).
They would like to exchange for two land parcels that were 150K each and eventually build on them. They didn't particularly want any other properties at this point. They were still left with 500K from their exchange that they would have owed taxes on.
When introduced to the concept of exchanging that 500K with a tenant in common property that would not only provide them income and appreciation potential without management hassles, this fit their needs perfectly.
They will be able to do a complete exchange, not pay any capital gains tax at this time, have their two lots for future use and have income from a good portion that is 100% more than they were getting from vacant land over the last 10 years.
They are well on their way to really building their wealth and retirement nest egg.
Paula Straub
Click Here to get assistance
Interview with the Pros - Educational resource
askpaula@savegainstax.com
Monday, April 24, 2006
Selling your Business and Keeping your Gains
Real estate is known to be an asset that appreciates greatly over time. Most know there is a capital gains tax consequence when an investment property is sold.
But what about your business? Maybe you are a physician selling a practice, a dry cleaner, a hair stylist, a construction company... Whatever your business, if you get ready to sell, you should visit a competent tax professional and find out what tax consequences you will face. They could be a lot greater than you think!
If you'd like to spread out those taxes over the rest of your lifetime rather than paying in one lump sum, take the time and investigate whether a private annuity trust might suit your needs.
If possible, it could save you a great deal of money and keep your gains working for you well into your retirement years.
Be on my next teleconference and learn more about how they work.
Also, stay tuned for details on a special upcoming teleconference featuring a guest speaker!
Paula Straub
Teleconference Link
Resource Link
askpaula@savegainstax.com
Monday, April 17, 2006
Tip for choosing a Tenant in Common Property
How do you know if the tenant in common property that you would like to exchange into is a good investment?
First, start by looking at it as if you were buying the entire building, not just a fractional interest. If you are not a sophisticated real estate investor, employ the aid of a commercial realtor or financial advisor who can go over the propectus/ sales data with you. Look at the assumptions made and see if they will justify the proposed return over the long haul.
Make sure you deal with a TIC Sponsor company who has been in business for a while and has a successful track record. Make sure the management company is experienced, well funded and can produce a long record of profitable properties they have handled.
If you are not comfortable with a varying return, or don't want the possible risk of putting in more money should things not go well, look into getting a triple net lease, where the burden is transferred to the management company.
Call a local realtor in the area where the property is, and ask their opinion on the location and building condition. If you have the time and inclination, fly there yourself and see it in person.
Do your due dillegence just as you would if you were financing the entire purchase yourself. The right exchange will bring you years of steady income, good appreciation potential and hassle free real estate ownership. It's worth your time and effort to make the right choice.
Paula Straub
Interview with the Pros - educational resource for tax saving strategies
askpaula@savegainstax.com
SaveGainsTax - free teleconference this week, sign up now!
Thursday, April 13, 2006
Tax Time - Again...
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
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
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
Subscribe to:
Posts (Atom)