One of the main reasons that investors — even savvy ones — give for failing to avail themselves of the many benefits the Deferred Sales Trust (DST) offers when selling a highly appreciated asset is that they fear the up-front legal fee they will pay to establish their own DST is too substantial to be worth it. However, is this really true? Let’s use the following case study to show how paying the DST legal fee compares to paying the costs inherent in foregoing its unique benefits.
Calculating any kind of tax, and the rate which you should apply to it, is not for the fainthearted. This is especially true of capital gains taxes. Why? Because so many factors can, and usually do, come into play when you’re dealing with capital gains. To begin with, as you already likely know, there are two types of capital gains taxes, one of which you’re sure to be liable for when you sell or otherwise dispose of an asset: long-term and short-term. Each of these has its own rate structure.
Tax season is quickly approaching, but it’s not too late to do some end-of-year planning that may well reduce the federal and state income tax you’ll have to pay come April. But you need to act quickly. Virtually all of the following tax reduction tips from Reef Point must be implemented by December 31.
As a high net worth individual, you likely are all too familiar with capital gains taxes. These taxes that you pay when you sell a highly appreciated asset such as a business, commercial property, investment, collectible or even your personal residence, can wipe out much of the profit you make. But what if there were a safe and legal way for you to defer your tax liability?
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?