Lorelei Mangan  |  Cal Bre# 00940135  |  (408) 309-4014  |  Lorelei@LoreleiMangan.com  |  Coldwell Banker - 1712 Meridian Avenue  San Jose, CA 95125

REAL ESTATe broker


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408.309.4014

Those of us who own highly appreciated homes are often reluctant to sell because of Capital Gains taxes. There is a perfectly legal way to defer capital gains tax and reduce your overall tax burden. The Deferred Sales Trust™ can provide a way out.

This capital gains tax deferral tool could save you thousands of dollars, and by having the opportunity to potentially make a profit on the money you would have paid to Uncle Sam in the year of the sale.

Let us introduce you to our tax planning team to answer any questions you may have.

"A Way Out"

If you own real estate with a large amount of equity and are not selling your property because of potential capital gain taxes, or can't find suitable, qualified property exchanges, then you may want to consider a Deferred Sales Trust™. Deferring taxes, legally, is not new. Some commonly used tax deferral methods include 1031 exchanges, charitable trusts and traditional seller carry-back installment sale contracts.

The Deferred Sales Trust™ can be used with any kind of entity, e.g.., LLCs, S or C election corporations, as well as individuals who own real estate, rental properties, vacation homes or land, to name a few.

There are significant benefits to a homeowner in electing to use the Deferred Sales Trust™ when electing to sell their property:

  1. Tax Deferral: When appreciated property/capital assets are sold, capital gains tax on said sale is generally deferred until the Seller/Taxpayer actually receives the payments.

  2. Estate Tax Benefits: May accomplish an "estate tax freeze" for estate tax purposes.

  3. Maintains Family Wealth: When properly structured, the principal inside the subject installment sales note can be preserved with "interest only" or partial principal payments creating the potential to pass on a large portion of the note principal to your legal heirs with proper estate planning.

  4. Estate Liquidity: Converts an illiquid asset into monthly payments.

  5. Retirement Income: Provides a stream of income that can be used as retirement income.

  6. Probate Avoidance: With proper estate planning.
  7. Eliminates Risks Associated with Ownership: By utilizing the Deferred Sales Trust™, you have taken an asset that is otherwise "exposed" or liability prone and converted it into a "no-liability" asset.

    Nothing is required to be given away to charity, as happens with the competing strategy know as a Charitable Remainder Trust.

    The Deferred Sales Trust™ allows all due principal and accrued interest to be paid to the Seller/Taxpayer via a custom prepared installment sales agreement, whereas the Charitable Remainder Trust often pays income (interest) only. The Deferred Sales Trust™ has the potential and likelihood to yield more bottom line dollars to the property/capital asset Seller/Taxpayer than a Charitable Remainder Trust.

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