Save Capital Gains TaxSave Capital Gains TaxResource for all information involving saving Capital Gains Tax on the sale of Highly Appreciated Assets such as Real Estate, Collections, Businesses, Stock Portfolios. Learn about Private Annuity Trusts, Charitable Remainder Trusts, and 1031 Exchang Articles
Are Private Annuity Trusts Being Challenged by the IRS?
2006-12-02 15:27:08 Does the IRS challenge Private Annuity Trust s? Of course they do.Does that mean you shouldn't have one if it is in your best interest? Of course not.The key here, like with anything, is to have it set up, funded and administered properly according to IRS tax rules. If it's done right, it won't be challenged.What are some of the red flags that trigger IRS challenges? Here's a few. These are all things done by parties trying to "bend" the IRS rules to suit their individual or joint purposes.1. If setting up the trust can be viewed as "Constructive Receipt". This basically means, the trust was thrown together at the last minute for no other purpose than to avoid paying capital gains tax. If done while in escrow, there needs to be evidence of contingencies of sale not yet met when the trust is created.2. The funds are invested in volatile investments which show losses in annual tax audits. The funds are supposed to be invested in prudent vehicles so that the trust has enough funds t... More About: Challenge , Hall , Bein
Part 3 of 3 - Origin of the Insured Structured Sale
2006-12-01 10:05:05 Part 1 covered the basics of an Installment Sale . Part 2 explained the concept of a Structured Sale . Part 3 will now go over how the combination of the first two concepts has become the Insured Structured Sale as it exists today. Using the example of a 500K sale of real property, here?s how the Insured Structured Sale might work. Assume this property is owned free and clear. A buyer is found and an agreeable sales price is determined (500k). Prior to close of escrow, an Assignment Company meets with the buyer, and the buyer assigns the obligation for making payments totaling the sales price to the seller. The buyer pays his 500K to the Assignment Company and his sale is complete. The Assignment Company now enters into a contract with the seller to make payments to the seller over a certain amount of years at an agreed upon interest rate. Capital Gains Tax and recaptured depreciation is deferred, and paid back in small chunks as payments are received. It is at this point the Insured... More About: Sure
Insured Structured Sale as PAT Alternative
2006-10-25 09:18:03 I want to invite you to a special teleconference this Thursday, October 26th to learn about an exciting new alternative to the Private Annuity Trust. As I stated in my last post, the PAT was discontinued until further notice by the IRS on October 18, 2006. The Insured Structure d Sale is a very effective capital gains tax saving strategy. I will be discussing the features and comparing it to the Private Annuity Trust. It is cutting edge information that you must learn about if you or anyone you know has a capital gains tax issue. Please go to this link and register now. Sign me up for the call. I look forward to cluing you in to your new alternative. Paula Straub SaveGainsTax 760-917-0858 More About: Alternative , Sure
There is a reason for IRS time lines in 1031 Exchanges
2006-10-21 14:51:04 For a 1031 Exchange , be it a straight 1031 or a 1031 Tenant in Common Exchange, IRS dates need to be observed. Not only for strict tax purposes, but for practical reasons as well. Once paperwork is filed with a Qualified Intermediary prior to close of escrow that a 1031 exchange will be made, one has 45 days from the date of close to identify property(s) that one intends to purchase. If there More About: Change , Time , Reason , Here
New Site for Real Estate Investors
2006-10-21 14:51:04 I have just launched a new site for Real Estate Investor s wishing to learn about Capital Gains Tax Saving Strategies. It is located at the link below SaveRealEsateGains You can sign up for a free report and be kept up to date with case studies and current news on how to structure your sales so that you will not owe huge amounts of capital gains tax when your highly appreciated property is More About: Real Estate , Site , Vest
Breaking News Regarding the Private Annuity Trust
2006-10-20 08:42:06 On October 18, 2006 the US Treasury Department issued a new proposed regulation regarding private annuity trusts. It is reg 141901-05. It has not been published yet, but will be very soon. For the time being, Private Annuity Trust s have been discontinued for use. We believe it is due to the number of PATs which were improperly structured, funded, and administered.In many cases, close relatives were made trustees and this brought into question the "hands off" intention of a non-grantor trust. The investments and borrowing practices in some of these trusts were also improperly and imprudently handled. In many cases the trusts were not properly set up, filed, and the tax returns required were either not filed as necessary or were filed in error. This was mostly due to non-professionals handling the details and not knowing what was required. For years, the trust company I represent has requested the IRS establish clear guidelines to prevent this type of abuse. It now seems this may be ... More About: News , Breaking News , Break , King
$1 Gain can Trigger 20K+ Tax Bill - Really
2006-09-27 11:18:01 Something very similar to the example in this article below by Robert Sommers happened to a woman I talked to last week. She bought her first investment property to fix up and sell at a profit. When she put it up for sale the market softened. She was carrying a $5500./mo loan and could only rent it for $2500./mo. By the time she lowered the price and paid realtor fees and was hit by the 3.3% More About: Tax , Real , Bill , Really , Ally
Forgiveness of Debt is a Taxable Event- Whether you like it
2006-09-27 11:18:01 A fact that not many people realize, even tax professionals and attorneys, is that paying off a mortgage at time of sale is a taxable event. The IRS considers it "forgiveness of debt". Many people think that because they owe 200K on a 500K sale, their gain is only 300K. But, if they bought the home for 100K, their gain is 400K and this is the amount that capital gains tax is due on. They usually More About: Event , Tax , Debt , Given , Give
FAQ- Can I control investments within a PAT?
2006-08-31 08:24:58 The short answer is "no". This PAT is a non-grantor trust. The trustee (who cannot be you or your spouse) is responsible for investing the funds. The responsibility of the trust is to make the agreed upon payments back to you for the entire amount of time it was set up for. This concept seems scary for some, as they are used to complete control over how their assets are invested. This is understandable, but should become comfortable if the proper steps are taken to protect your investments. You do have some input before the trust is created. Although some advisors tout volatile investments such as stocks and mutual funds, caution should be taken with this approach. Just as these vehicles offer a large upside, they also have the possibility of major loss. Your trust could run out of funds and be unable to complete the payments due you. Once you begin receiving payments from the trust they are fixed. The rate used to calculate your payments is the Federal MidTerm Rate. Even if the tr... More About: Investment , Men , With , Vest , Investments
Financial Suicide
2006-08-17 19:48:02 Something very sad occurred today. I wish I could say I had never seen something similar happen before, but I have. Seemingly smart people make financially devastating and irreversible choices. The cause, I believe, is partly fear of something new to them, and partly the unwillingness to trust or listen to those professionals they have chosen to guide them. I realize that once one is burned in a More About: Financial , Suicide , Finan , Fina , Cide
If it sounds too good to be true, Change tax professionals
More articles from this author:2006-08-17 19:48:02 Let me pose a scenario and see if it sounds a bit too good to be true. Sal makes 15K per year at his job. He owns a rental property he purchased for 100K five years ago and is selling today for 600K. Let?s just say his capital gain including all improvements, depreciation, and after all costs of sale is 450K. (I?m keeping it simple for this example) Sal goes to his local tax person, and this guy More About: Sounds , Tax , Profession , Change , Sound 1, 2, 3, 4 |
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