San Francisco Real Estate - Residential

Private Annuity Trusts may provide enormous financial benefits - Part 2

This article is provided by our friends at Quantum Advisors.

- Mick Orton

As your real estate experts, we are very in tune with the concerns, problems, and issues that real estate owners face in today’s real estate market. One of these concerns is that the market has been very good to them, but now they need to find an efficient way to capitalize on their gains. Many owners/investors, CPA’s, attorneys, financial advisors, and real estate professionals are quick to say:

• “I’d like to sell my property but I don’t want to pay taxes.”
• “I’d like to get rid of the management responsibilities of my property but I don’t want to pay taxes.”
• “I can’t find a good property to 1031 exchange into, and I don’t want to pay taxes on an outright sale.”
• “I’d like to diversify my wealth into other investments, but I don’t want to pay taxes.”
• “I’d like to get more income from my assets but I don’t want to pay taxes.”
• “I’m nervous about meeting all of the strict requirements of a 1031 exchange to avoid taxes."
• “I’d like to plan my estate properly and I don’t want to pay estate taxes."
• “If I do a 1031 exchange, my new property will have the same very low basis.”
• “I was never told I would have to “recapture” the depreciation I deducted in all past years.”
• “I really want to sell my business but I don’t want to pay too much in taxes.”
• “I would like to protect my assets from creditors and lawsuits.”
• “I’d like to give money to charity, but I want my assets to pass to my children.”
• “I’d like to eliminate the liability of owning property but I don’t want to pay taxes.”
• “The Solution: Creative Strategies To Eliminate Current Taxation – And Help You Reach Your Financial Goals!

If you could “create” your own strategy to minimize taxation on your assets, especially real estate, you’d probably try to include these provisions in your plan:

• Ability to avoid current taxation on the sale of your property.
• No limit to the amount of current taxable gain you can avoid.
• No limit to the amount of depreciation recapture you can avoid.
• No requirement to immediately reinvest back into property.
• No requirement to reinvest in equal value property.
• Ability to receive needed income from your assets, when you need it, on a tax-advantaged basis.
• Ability to defer the income from your assets until you actually need the income.
• Ability to diversify your assets to minimize risk.
• Increase your basis on new properties to reduce future taxable gain, increase depreciation deductions.
• Ability to protect your assets against creditors and lawsuit judgments.
• Ability to pass on any amount of assets to your heir’s estate tax free.
• Access to funds for emergencies and opportunities.
• Deduct suspended carryover losses upon sale of the property while all current taxation is avoided.
• Ability to sell property without increasing the asking price to cover taxes that will have to be paid.

A Private Annuity Trust, properly implemented, will let you achieve all these objectives!

The power of the Private Annuity Trust is that it is a very conservative tax strategy that will help you defer the taxes you have to pay on sales of your appreciated assets, over your lifetime.

The choice is yours:

You can pay the taxes you owe immediately.
-OR-
You can pay the taxes you owe over a lifetime – it’s like a 0% interest loan from the IRS!

The Private Annuity Trust structure allows you to pay tax on your real estate gains over your entire lifetime. It is very important to remember that you are avoiding current taxable gains by deferring the payment on the entire gain over your lifetime! Unlike other tax deferral strategies, like 1031 exchanges, a Private Annuity Trust can be used with primary residence sales. Our next issue will detail the taxes saved, and the lifetime income created in a residential sale example.

For more information, or for a FREE, 10 page Tax Savings Analysis on your property, contact Gary Katz at QFN – 800-224-1053 – or email Gary@QAplan.com.

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QFN is a full service financial advisory practice in Sacramento, CA that helps business owners, real estate owners, professionals, high net worth families, and individuals planning for success create, protect, manage, and distribute their wealth. Our comprehensive asset protection strategies help clients retain more of their resources, to better build their financial security, and insulate them from potential liability. Our comprehensive wealth building planning strategies help clients increase their opportunities for financial success, and make sure that all assets are used to maximum advantage, for today, and for future generations. www.QAPlan.com

- Betsy Hartwell - Quantum Advisors

*This is the second in a series of articles - to be continued...

Part 1 may be read here.

posted by SFResidence.com @ 7:26 AM