As a professional serving high-income, high-asset clients, you undoubtedly are always on the lookout for innovative ways to increase their family wealth and save them money that would otherwise go to pay taxes. What if you could offer them a strategy with the following characteristics:
Unfortunately, higher capital gains taxes appear to be almost a certainty in the near future. Why? Because President Biden’s $3.5 trillion American Families Plan, if passed by Congress, will raise the long-term capital gains rate from its current 20% to 39.6% if you earn more than $1 million per year.
f you’ve been keeping up with the news coming out of Washington, D.C., the past several months, you know that President Biden’s $1.8 trillion American Families Plan calls for raising the federal long-term capital gains rate from its current 20% to 39.6% if you earn more than $1 million per year. Ouch! As the owner of highly appreciated investment real estate, no one need tell you the enormous negative impact such a capital gains tax hike would have on you when you decide to sell one of these properties.
In 1963, the incomparable Bob Dylan wrote “The Times They Are A-Changin.” While his song referred to the societal and political changes occurring in the 1960s, it could just as well apply to the tax changes on the horizon today.
As the owner of one or more highly appreciated assets, you may have heard about the Deferred Sales Trust (DST), the innovative strategy that allows you to defer the substantial capital gains taxes you usually face when you sell one of these assets. Some of what you may have heard, however, could be inaccurate.