CAPITAL GAINS taxes are incurred when an owner sells an appreciated asset for a profit.  This asset may be a highly appreciated piece of real estate, a growing business, or maybe just stock that has risen in value.  Capital gains taxes are both painful and obvious as they happen right up front and are paid in the same tax year as the sale.

In addition to the capital gains tax, there are also other upfront taxes a seller may incur such as: state taxes, depreciation recapture, the alternative minimum tax (AMT), or loss of tax deductions as a result of the sale.  Like the estate tax, these taxes can add up to be considerable and consume a large portion of the seller's gain.

There are many strategies that can be used to limit the amount of capital gains taxes a seller incurs.  Many involve simply deferring the taxable gain until a later time.  By deferring the gain the seller can earn a return on the entire amount of the proceeds from the sale rather than just the after-tax amount.  And if the seller passes away, the deferral vehicle may “step up” in basis, thereby avoiding capital gains taxes entirely.

Other strategies look to eliminate the gains or to spread them out into small increments over many years…possibly into years when your tax brackets may be lower.  Many sellers may also look to find tax losses or tax credits that match up with their gains to help offset some or all of the taxes.

At NATD, we specialize in the many strategies aimed at accomplishing these goals.  These may include strategies such as Structured Sales, SPATs, TICs, DSTs, TICUPREITs, 1031 exchanges, Flip Unitrusts, Donor Advised Funds, Self Directed Installment Sales (Controlled Installment Sales), Tax Credit or Tax Write-Off programs, or using a defined benefit or other pension plan to help take money out of a business before disposition.

Call today for your free consultation and more information about how the National Associates for Tax Deferral can provide you with a solution customized for your particular situation.  All inquiries are held in the strictest of confidence.