Sellers Of Real Estate Can Avoid Taxes
Real Estate Taxes – Tax Planning Before You List Your Highly Valued And Highly Appreciated Real Estate Can Save You A Lot Of Money!
Here is what it amounts to, plan and save now or WAIT and pay the IRS more than you should. Placing your property for sale on the MLS with your Realtor, advertising it, and getting it sold is only one piece of the real estate transaction pie. The net amount you put in your pocket at the closing table is of great importance!
Do you want the best ROI (return on investment) on your property? Do you want to leave your heirs the most money tax free? Do you want to fund your favorite charity and at the same time sell your highly appreciated property while keeping the maximum money for the people you love?
With my help as your real estate broker and insurance agent I will help you find the right team of professionals to accomplish your financial goals. The professionals will include, an estate planning attorney, CFP (certified financial planner), CPA (certified public accountant), and your favorite tax exempt charity. The power of the “waterfall” effect is just phenomenal using the expertise of all the professionals around the table working for you and your families assets. The “waterfall” effect is when the proper estate planning is done in advance so your assets will fall downward in your family tree to your children, grandchildren and as far as the eye can see protecting future generations from paying unnecessary taxes!
There are numerous illustrations we will discuss in the coming weeks. Today I will rehearse a great way to pass along your real estate holdings.
The Charitable Remainder Trust “CRT” has many different variations for different goals, but in this illustration we are creating a “CRT” at the same time you will list to sell your appreciated real estate. It is important to note that you must create the “CRT” first before you accept an offer on the property you will be selling.
The “CRT” has two interests, an income interest and a remainder interest. When the grantor creates the “CRT” the grantor contributes the highly valued real estate to the “CRT”. The proceeds are then invested in the “CRT” so there are no capital gains taxes paid. The “CRT” names a charity as the Remainder Man. In exchange the “CRT” pays the grantor an income on a yearly or more frequent basis from the proceeds of the sale of the real estate. With the tax savings portion of the sale the “CRT” purchases a life insurance policy on the grantors of the “CRT” for the value of the gift. When the grantor dies the family heirs are paid. The heirs that would have received the grantors estate are paid the life insurance to offset the gift that is given by the grantor to the charity using the “CRT” and the “CRT” retains the remainder of the “CRT” assets.
This commentary has widely ranging variations depending on the each persons estate size, and if the IRS estate and gift tax exclusions have been used. This illustration is used to get the creative mind to plan to disinherit the IRS and retain your families assets. Please do not wait, the congress and administration in Washington may change tax law and you could loose more of your assets than you can stomach. Contact me and I will send you an “Estate Organization Fact Finder” at no charge.
The above commmentary is for educational purposes only and is not intended to constitute legal, tax, accounting, or investment advice. You should consult your attorney for specific advice on your estate.
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