Reduce Your Capital Gains Tax When Selling Valuable Assets
Guns and butter? Guns are the things that appreciate with value such as fine art, real estate, a business, planes, jewelry, boats, race horse, or stocks and bonds.
Butter are the things that offer instant gratification but gradually decreases in value which can be classified as cars, computers, machines, office furniture, etc.
If you were to sell any of the appreciated assets you will become subjected to pay a significant tax expense if you don't research and follow the appropriate guidelines.
Within this article I will point out one of the ways to avoid those large tax bills while selling your appreciated assets ranging from land to collectibles.
This powerful, tax efficient method that I am referring to is titled the Private Annuity Trust (PAT).
Another major benefit alongside the fact that PATs helps its client avoid capital gains taxes is that it's one of the most secure asset protection programs available today.
A judgment cannot be made against it meaning that no one can sue you and seize the value of your personal property or real estate.
The preceding sentences are a critical piece to the financial strategy of an investor or a citizen who just want to secure their property.
Also PATs will enable the owner to assign a beneficiary to the trust and leave all of their assets exempt from estate taxes and probate liabilities.
I want to increase the awareness of PATs availability, because they have been primarily used be real estate investors.
Even amongst the real estate group PATs is still a fairly new concept.
When The Wall Street Journal decided to dedicate an article to the avoidance of capital gains taxes, it received an overwhelming response from readers requesting more information on the subject.
PATs are catching a wave within the real estate world, but what people should know is that these accounts can also minimize taxes smaller property such as artwork, jewelry, and other things that are known as appreciated assets.
To illustrate how PATs reduce taxes legally, let's set up a real world scenario.
Assume that Lacey, a 50 year-old woman, has a collection of priceless jewelry that is estimated to be valued at $6.
1 million on the market.
If Lacey sold her possessions of jewelry without a PAT, she could easily have a tax bill beyond the $1 million dollar mark.
Instead if Lacey transfers the ownership of her property into a PAT, she could have a significantly smaller tax expense.
PATs are setup to pay the contract holder of the trust an annualized payment, or what is known as an annuity, over the rest of their life.
The seller of the property will still be required to pay some of the some of the capital gains taxes, but will not be hit until they decide to take the money out.
With this setup the seller can spread out the taxation over the course of their life without the worry of being penalized by the IRS or the effects of interest.
This will in turn give the investor substantial financial leverage, and flexibility.
There are several components that control the amount of annuity payments that is setup by the IRS.
An easy method used to estimate the installment; states that if Lacey's life expectancy based on the mortality tables, is another 30 years, she will get annual deposits of 1/30 of the value the PAT plus the interest that is determined by the IRS.
What this simply means is that she will only be accountable for 1/30 of the capital gains tax from the initial sale of the assets each subsequent year.
Lacey will then have more of her profits invested, and working for her, creating a secure nest egg for the future.
I cannot forget to point out the fact that PATs protect your investment from financial threats such as lawsuits, liens, etc.
A smart way that clients can use PATs to grow their wealth is to use the money gained from the sale of the initial assets to reinvest.
In story about Lacy, she could use the money from the trust to buy new fine jewelry or artwork, allow those items to appreciate, and follow that up with another PAT.
To those who are collectors of "Guns", I would be selfish not to inform others so they can at least have the chance to look into the benefits of a PAT.
There are no parameters to the amount that you can transfer into a PAT.
The structure of a PAT alone, is a significant planning tool, that can allow people to leave valuable assets to generations to come, without the worry of losing money to judgments or to taxes during transfers.
This is something that can initiate safe, smart, investing for those with "Guns".
It is my pleasure to help Americans enjoy their retirement years with financial security.
I care about providing products that protect you and your family.
I am committed to ensuring peace of mind for your retirement future.
My commitment to unsurpassed service and strong contract owner benefits has allowed me to experience consistent growth within my industry.
I'm the one to offer you diverse financial planning choices for your retirement dollars.
Butter are the things that offer instant gratification but gradually decreases in value which can be classified as cars, computers, machines, office furniture, etc.
If you were to sell any of the appreciated assets you will become subjected to pay a significant tax expense if you don't research and follow the appropriate guidelines.
Within this article I will point out one of the ways to avoid those large tax bills while selling your appreciated assets ranging from land to collectibles.
This powerful, tax efficient method that I am referring to is titled the Private Annuity Trust (PAT).
Another major benefit alongside the fact that PATs helps its client avoid capital gains taxes is that it's one of the most secure asset protection programs available today.
A judgment cannot be made against it meaning that no one can sue you and seize the value of your personal property or real estate.
The preceding sentences are a critical piece to the financial strategy of an investor or a citizen who just want to secure their property.
Also PATs will enable the owner to assign a beneficiary to the trust and leave all of their assets exempt from estate taxes and probate liabilities.
I want to increase the awareness of PATs availability, because they have been primarily used be real estate investors.
Even amongst the real estate group PATs is still a fairly new concept.
When The Wall Street Journal decided to dedicate an article to the avoidance of capital gains taxes, it received an overwhelming response from readers requesting more information on the subject.
PATs are catching a wave within the real estate world, but what people should know is that these accounts can also minimize taxes smaller property such as artwork, jewelry, and other things that are known as appreciated assets.
To illustrate how PATs reduce taxes legally, let's set up a real world scenario.
Assume that Lacey, a 50 year-old woman, has a collection of priceless jewelry that is estimated to be valued at $6.
1 million on the market.
If Lacey sold her possessions of jewelry without a PAT, she could easily have a tax bill beyond the $1 million dollar mark.
Instead if Lacey transfers the ownership of her property into a PAT, she could have a significantly smaller tax expense.
PATs are setup to pay the contract holder of the trust an annualized payment, or what is known as an annuity, over the rest of their life.
The seller of the property will still be required to pay some of the some of the capital gains taxes, but will not be hit until they decide to take the money out.
With this setup the seller can spread out the taxation over the course of their life without the worry of being penalized by the IRS or the effects of interest.
This will in turn give the investor substantial financial leverage, and flexibility.
There are several components that control the amount of annuity payments that is setup by the IRS.
An easy method used to estimate the installment; states that if Lacey's life expectancy based on the mortality tables, is another 30 years, she will get annual deposits of 1/30 of the value the PAT plus the interest that is determined by the IRS.
What this simply means is that she will only be accountable for 1/30 of the capital gains tax from the initial sale of the assets each subsequent year.
Lacey will then have more of her profits invested, and working for her, creating a secure nest egg for the future.
I cannot forget to point out the fact that PATs protect your investment from financial threats such as lawsuits, liens, etc.
A smart way that clients can use PATs to grow their wealth is to use the money gained from the sale of the initial assets to reinvest.
In story about Lacy, she could use the money from the trust to buy new fine jewelry or artwork, allow those items to appreciate, and follow that up with another PAT.
To those who are collectors of "Guns", I would be selfish not to inform others so they can at least have the chance to look into the benefits of a PAT.
There are no parameters to the amount that you can transfer into a PAT.
The structure of a PAT alone, is a significant planning tool, that can allow people to leave valuable assets to generations to come, without the worry of losing money to judgments or to taxes during transfers.
This is something that can initiate safe, smart, investing for those with "Guns".
It is my pleasure to help Americans enjoy their retirement years with financial security.
I care about providing products that protect you and your family.
I am committed to ensuring peace of mind for your retirement future.
My commitment to unsurpassed service and strong contract owner benefits has allowed me to experience consistent growth within my industry.
I'm the one to offer you diverse financial planning choices for your retirement dollars.
Source...