How To Reduce Income Taxes In 2014

10  Download (0)

Full text

(1)

T A C I T

A strategy for reducing income taxes in 2014

T

ax deduction for you

A

void capital gains

C

haritable contribution

I

ncome for life or

T

ax-free passing of assets to your heirs

Prepared by

Elliot Goldberg

Registered Investment Advisor eg@goldata.com

Goldata Financial

(2)

The purpose of this presentation is to demonstrate

how the TACIT strategy may benefit the reader. This

information is believed to be true and is subject to

change.

THIS PRESENTATION IS NOT INTENDED TO SERVE

AS A PROJECTION, PREDICTION OR ANY TYPE OF

LEGAL OR TAX ADVICE OF ANY KIND.

Please contact your lawyer, accountant and other

professionals to see if this strategy is right for you.

(3)

Is this you?

Benefit from a

T

ax-deduction this year

Benefit from

A

voiding the capital gains tax on

selling an appreciated asset

Support a

C

harity

Receive monthly guaranteed

I

ncome for life or

pass a portion of your estate to your heirs

(4)

Then

T A C I T

may benefit you!

T

ax deduction for you

A

void capital gains

C

haritable contribution

I

ncome for life or

(5)

1.

2.

You donate your appreciated

asset to the CRT and receive a

charitable tax-deduction for the

current year and avoid the capital

gains tax on the appreciated asset

3.

The CRT sells the appreciated

asset for full market value and

pays no income tax on the gain

Your lawyer sets up a Charitable

Remainder Trust (CRT) to receive

your appreciated asset

(6)

Bob wants guaranteed lifetime income

The CRT purchases an annuity that will provide monthly income to Bob for as long as he lives

Judy wants to pass on assets to her heirs income tax and estate tax free

The CRT purchased an annuity that will provide Judy cash to purchase a guaranteed benefit life insurance policy on herself

naming her heirs as the beneficiary

Upon her death, the life insurance proceeds pass to her heirs income tax and estate

tax-4.

OR

(7)

For Income production

Bob, age 65, bought 5,000 shares of ABC stock

a few years ago for $10 per share.

The current price is $100

Bob’s lawyer sets up a Charitable Remainder Trust (CRT)

Bob transfers the 5,000 shares of ABC stock to the CRT

Bob gets a current year charitable tax deduction of approximately

$206,000

Bob pays no capital gains tax on the transfer

CRT buys an annuity that pays Bob $28,000 per year for Bob’s

lifetime

Charity receives remainder of trust assets upon Bob’s death

The $500,000 of ABC is no longer part of Bob’s estate and is not

subject to estate taxes

(8)

Judy is age 50 and in good health

Judy also bought 5,000 share of ABC a few years

ago for $10 per share

Judy’s lawyer sets up a Charitable Remainder Trust (CRT)

Judy transfers 5,000 shares of ABC stock to the CRT

Judy gets a current year tax deduction of approximately $197,000

Judy avoids paying the capital gains tax on the appreciation of ABC stock

CRT buys an annuity that pays $45,000 annually to Judy for the next 10

years

Judy uses $25,000 of this annual payout to buy a guaranteed benefit life

insurance policy. Judy’s heirs will receive over $1,100,000 income and

estate tax-free

After 10 years, the CRT is dissolved and the charity receives the

remainder. The insurance policy is fully paid up

(9)

What are my income options?

You can receive a fixed amount or a fixed percentage of the CRT assets annually.

Do I have to take the income now?

No. You can set up the CRT now, take the income tax deduction in the current year and postpone taking the income until later.

Who can receive the income from the CRT?

The income can be paid to you, the survivor of you and your spouse, your children or

any entity you decide assuming the CRT meets certain requirements. Gift and estate taxes may apply.

What are the best assets to donate?

The best assets to donate are those that have significantly appreciated in value since their purchase.

Can the donor be the trustee?

Yes.

Can I change the trustee?

Yes. You can change the trustee as long as you are alive.

Can I change the charity?

Yes.

Is this all I need to know?

No. A meeting with your tax professional, investment advisor and estate lawyer is strongly suggested. This will allow them to answer your specific questions based on your financial goals and customize your CRT to your needs.

(10)

Elliot Goldberg, Goldata Financial’s principal, is a Registered Investment Advisor who helps individuals and families use safe, guaranteed* investments that generate a reasonable rate of return to help meet current and/or future income goals.

Every client is unique and their circumstances, timetables and goals are also unique. Elliot will sit down with you and develop a custom plan for helping you meet your current and/or future income goals. Questions are always encouraged and continuing communication is a great way to make sure your custom plan continues to meet your goals.

If you like the idea of safe investments to help meet your current and/or future income needs, please call Elliot Goldberg at (610) 999-3599 or email him at eg@goldata.com.

Figure

Updating...

References