Monday, September 11, 2017
Wealthy clients selling their homes, bonds, stocks, or other high-value assets may come face-to-face with the prospect of paying capital gains taxes. For those in the highest tax bracket, the maximum rate is usually 20%. This significant tax bite encourages many clients to seek out methods to protect their wealth. A common means is a § 1031 exchange. This section of the Internal Revenue Code permits taxpayers to postpone tax payments on gains as long as they reinvest their money into similar property. The choices available to clients are widely varied: charitable remainder annuity trusts, charitable remainder unitrusts, flip-charitable remainder unitrusts, donor-advised funds, charitable gift annuities, etc. Clearly, there is a plethora of options for wealthy clients seeking to shield assets. In choosing any investment vehicle, it is best to seek out a professional so they can help determine what plan works best on client-to-client basis.
See Jeff Stimpson, What To Do If Congress Eliminates 1031 Exchanges, Financial Advisor, August 28, 2017.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.