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Capital Gains Tax Avoidance - Beware of the Myths

How difficult is it to avoid capital gains taxes? The answer of course, depends on the type of asset you are trying to shelter. If it is a home, simply changing the ownership to a Trust that you own and control may substantially reduce the capital gains tax, but depending on your situation this strategy may be suboptimal. Perhaps the worst capital gains tax mistake people make is when they attempt to do legal work themselves via a quit claim deed. There is a reason street surgeries don’t work, and attempting to prepare a quit claim deed without a licensed attorney is equivalent to a financial street surgery. Perhaps the street surgery option is not even a remote temptation, but we encourage you to look at the full ramifications of any solution. If capital gains taxes are reduced or eliminated, will income taxes rise given a particular solution? What about estate, gift, generation skipping, or IRD taxes? Unfortunately there exist potential creditor sources beyond simply the sale of an asset. So while there may be a way to reduce capital gains tax now, will that same benefit carry to one’s children? Yes, the Treasury Department is a creditor source if capital gains tax planning is not conducted properly – the laws are written to make it very expensive for those who do not do proper planning.

Legacy Advisor Group has helped clients prepare a special type of Capital Gains Tax Elimination Trust with several key benefits:

• Capital Gain Tax Avoidance
• Income Tax Savings from Deductions
• Increase Capital Kept in your Business
• Increase Lifetime Income
• Increase Benefit to Heirs (May Require other Planning)
• Estate Taxes Reduced or Eliminated
• Increase Future Charitable Gifts

A significant downside of the Legacy Advisor Group Capital Gains Tax Elimination Trust relates specifically to timing: if the sale of the asset is already under contract, the opportunity for the full benefit of capital gains tax elimination has expired. Additionally, there may be challenges during the deferral period that should be discussed with an attorney at Legacy Advisor Group. So if you know are pursuing the correct solution, then the next hurdle is to get the timing right.

Why Choose Legacy?

  • We coordinate your team of attorneys, financial planners, accountants, and insurance experts to help you get your estate plan in order and eliminate unnecessary delays, expenses and all estate taxes.
  • We practice only estate planning.
  • We guarantee your satisfaction, or we don’t get paid.

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