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A
little simple planning & strategy can put more
money in your pocket & not Uncle Sam's
My
husband's aunt recently sold some income properties.
Consequently, she had to pay Capital Gains Taxes of
approximately $162,000 to the IRS and State. As an
"asset protection planner" in the family,
I explained several options to her hoping she would
make the right decision and put as much money as possible
into her pocket, not Uncle Sam's. Despite of all my
efforts, her final decision was to just sell them
and pay the taxes, because her financial advisor told
her so. I can't believe there are financial advisors
out there who would give such bad advice. (Maybe they
are secretly working for the government!)
Anyway,
let's look at some numbers about her situation:
<Scenario
A>
She received a check from escrow of $620,000. After
paying capital gains taxes, her net is about $458,000.
She wants to invest the money and start receiving
income from the investment immediately and for at
least 25 years. If her investments earn 7% annual
return, hypothetically, she'll receive about $35,000
annual income for 27 years.
<Scenario
B>
If she would've listened to me and done one of the
strategies I explained in the previous issues of IPU,
she could've invested $620,000 instead of $458,000.
She would have $162,000 more to invest to begin with.
With the same return of 7% as the previous scenario,
she would receive $48,000 annual income for 27 years.
Even though she might pay deferred capital gains taxes
from the income, she will still net at least $13,000
per year more than Scenario A. In addition to that,
in this scenario, her assets are protected from lawsuits
& creditors, and it will go to her heirs upon
her passing without estate tax or probate. This strategy
is not only for deferring or eliminating Capital Gains
Taxes, but is also a very effective Estate Planning
and Asset Protection tool.
If
you're considering selling your property, you must
seek professional advice for Estate and Asset Protection
Planning. And please remember this; to build your
wealth there are 3 very important components;
(1) Invest wisely (2) Protect your asset, and (3)
Defer Capital Gains Taxes and eliminate Inheritance/Estate
Taxes and Probate.
For
more information regarding this article, contact Tracy
Taguchi at (310) 800-6333 or email: ytaguchi@scfsecurities.com
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