An effective tax strategy is a year-long process. It requires planning, evaluation and review. While eliminating taxes is nearly impossible, tax deferral strategies allow you to delay payment and lower your overall tax obligation. If you have a high net worth, are in a high-income bracket or intend to sell highly appreciated assets, you could owe a hefty tax bill unless you take steps to offset or lower your taxes.
If you hold substantially appreciated assets, selling those assets can result in a hefty tax bill. Turning over a sizable proportion of the profits from the sale significantly reduces the benefits you gain from making a sound investment decision. However, you don’t necessarily need to take such a hit, at least not upfront.
In this informative webinar about the Deferred Sales Trust ™ and how Business Development can Accelerate your Growth, we interview Paul Brar, our new Director of Business Development, who discusses how to use a Deferred Sales Trust as a growth tool based on his previous experience in Asset Management.
The federal and most state governments consider any property you own to be an asset. Profiting from an asset’s sale results in a monetary (or capital) gain. When the sale meets specified criteria, the government levies a tax on the profit. There are two types of capital gains taxes and tax rates. You incur taxes for the year you sell the asset unless you use a strategy that qualifies for deferment, such as a deferred sales trust.
The federal government considers anything you own or use as a capital asset, including your financial investments. In other words, it has a monetary value. If you sell these assets, the difference between the price you paid for it — adjusted to reflect valuation changes since purchase — and the sale price is a capital gain or loss.