In a previous post, we explained how the Deferred Sales Trust (DST) can benefit you if you live in a state, such as California, that imposes a state income tax. But what if you are fortunate enough to live in a state with no state income tax? How does the DST benefit you then? Read on to discover two ways in which the DST can shield you from substantial capital gains taxes when you sell a highly appreciated asset. For purposes of these case studies, assume you live in Florida, one of the states that imposes no state income tax, and therefore no state capital gains tax.
If you’re a successful long-time investor, or someone who has made good use of your stock options, you may well find yourself in the position of holding one or more chunks of highly concentrated stock. On the one hand, this disproportionate wealth allocation puts you at substantial risk. On the other hand, selling this highly appreciated stock can cause a capital gains nightmare. What to do?
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:
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.
If you’re one of the nation’s 73 million baby boomers at or very near retirement age, you may well have highly appreciated assets, such as real estate or a business, that you want to sell to help fund your retirement. The problem, however, is the potentially enormous capital gains taxes you face if you dispose of these assets via a conventional sale. Unfortunately, these taxes could eat up over half of your sale proceeds.