I'm sure you know of folks, perhaps yourself included, who have owned real estate for many years and have seen their properties greatly appreciate in value over that period. They have also advanced in age, their objectives have changed from what they were when they purchased the property and they now would like to sell. But the problem is that they think they can't sell because their CPA has told them that they would get clobbered by major capital gains taxes associated with the sale if they did.
Well, we are able to show these folks how they can sell their appreciated property, solve the tax problems and create dependable lifetime income-all with the government's blessing!
Call us at 760-436-0087 or e-mail us.
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Maximize Your Profit by Knowing Your
EXIT STRATEGY
Before You Decide to Sell
You may be surprised to learn that your obligation to the I.R.S. when you sell your property may be even higher than the current 15% capital gains tax rate. Without a well-crafted exit strategy in place, a significantly greater portion of your expected profit may also be taken in state and federal taxes. We design the exit strategies that are tailor-made to your needs and objectives so that you can confidently move forward to sell your property and maximize your profits.
Know Your Alternatives
Every property owner should know what alternatives are available to eliminate or reduce taxes and how they can positively affect the sale of their asset before they make the decision to sell. It is best to first analyze the tax position and then determine what strategies are most effective under the law to eliminate the taxes entirely or at least make them comfortably manageable. This kind of foresight prepares you to be better informed as to how best to approach the sale of your property.
We'll Provide You a Free Pre-Sale Tax & Income Analysis
Strategies are available that can effectively help remedy the tax concerns that you may have if you sell your appreciated property, especially investment real estate. Included among the tax issues addressed are I.R.C. Section 1250 Unrecognized gain, I.R.C. Section 1231 capital gain and Mortgage in Excess of Basis. We equip you with the knowledge needed to make a better informed decision regarding the disposition of your property and how that decision best benefits you and your family.
Benefits to You
Provided at NO COST TO YOU, the Pre-Sale Tax & Income Analysis is an unbiased report that provides you an objective view as to your tax standing should the asset be sold without an effective exit strategy. It also outlines for your consideration proven strategies supported by tax law that might be employed to eliminate or, at least, manage the taxes and optimize your profit at sale. In addition, most clients usually enjoy greater income and tax benefits than they previously had by owning the property.
As our client, you will have a better awareness of your current standing, what you can effectively
do to remedy your tax concerns and maximize your profit and income at sale.
A Real Life Example
A 70-year old lady inherited a 10-unit apartment building from her sister's estate in 1990. Valued at $449,000 the units rose in value to $825,000 and had no mortgage debt. If she were to sell the building, she would owe $119,838 in capital gains taxes.
Her goals were to sell the building, solve the capital gains taxes and replace her $19,000 annual income received from her apartments.
Planning Results:
She sold the apartment building, spread the capital gains taxes out over her 16-year life expectancy and received a tax-free lump sum of $75,000.
In addition, the tax law-supported Solution she chose to implement now provides her $64,900 in before-tax annual income--by IRS mandate! She now enjoys an after-tax annual income of $50,687, a 281% increase above what was provided to her by the apartments
Following is a Comparison Chart of Benefits that reviews the various options that tax law provided to meet her objectives. She chose to implement Solution 3.
Comparison Chart of Benefits:
| |
If Client Were to Sell
Without an Exit Strategy |
Solution 1 |
Solution 2 |
Solution 3 |
Solution 4 |
| Federal Taxes |
$84,291 |
Spread out
over 16 years |
Eliminated |
Spread out
over 16 years |
Deferred |
| State Taxes |
$35,547 |
Spread out
over 16 years |
Eliminated |
Spread out
over 16 years |
Deferred |
Total Taxes Due
for Year of Sale |
Client pays
$ 119,838
|
Tax Deduction
of $215,453
Saves $78,209
in potential
taxes.
|
Tax Deduction
of $279,000
Saves $101,277
in potential
taxes. |
Spread out
over 16 years |
Deferred |
Available Realized
Gain to You |
$624,162 |
$657,617 |
$657,617 |
$657,617 |
$825,000 |
Projected
Before Tax
Annual Income |
$43,691 |
$44,060 |
$46,003 |
$64,990 |
$46,003 |
Projected
After-Tax
Annual Income |
$29,491 |
$40,939 |
$39,147 |
$50,687 |
$34,887 |
Your situation, of course, will be different. Consequently, what can be done for you should be tailor-made specifically to your needs and objectives. However, don't you agree that you, too-with no cost or obligation--should explore what Congress has already made available for you to solve the tax problems if you were to sell your property and how to maximize your income?
Give Dennis or Sunshine a call today at (760) 436-0087
for your free Pre-Sale Tax & Income Analysis.
The Smith Team
We Make Home Buying & Selling Easy!
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