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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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