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
Savegainstax@gmail.com
760-917-0858 or 888-338-3036 toll free
www.savegainstax.com
Wednesday, September 02, 2009
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
760-917-0858
savegainstax@gmail.com
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
760-917-0858
savegainstax@gmail.com
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
760-917-0858
savegainstax@gmail.com
* 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
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
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