| Over the past several years, many people
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| | With a 1031, you must buy another
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| have made big profits in the real estate
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| | "like-kind" investment property in order
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| boom-at least on paper, before
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| | to avoid paying capital gains tax. You
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| calculating the capital gains tax owed.
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| | must name the new property you plan to
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| Now that the real estate market is
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| | buy in 45 days, and the new property must
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| leveling off, and even predicted to dip,
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| | cost at least as much as what you sold
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| many property owners are beginning to
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| | the old property for. If you choose not
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| realize that once taxes are paid, the
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| | to reinvest, the government expects you
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| remaining balance is far less than they
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| | to hand over the capital gains tax and
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| anticipated.
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| | depreciation recapture tax immediately;
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| However, with strategic implementation of
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| | meaning you'll be hit hard right when
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| a powerful, tax-efficient selling
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| | you're ready to finally reap the fruits
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| resource, there is finally a way to sell
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| | of your real estate investments.
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| real estate, including both primary
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| | There are plenty of heart wrenching
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| residences and investment properties, and
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| | stories about real estate investors who
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| not pay exorbitant capital gains on real
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| | banked their entire lives on retiring
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| estate. The solution is called a Private
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| | with the profits from their investments,
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| Annuity Trust, an investment strategy
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| | only to find that they would not be able
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| that allows you to not only defer capital
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| | to live the lifestyle they envisioned
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| gains taxes, but to protect your
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| | after the taxes were paid.
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| remaining assets via a trust, transfer
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| | On the other hand, with the Private
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| wealth to beneficiaries without taxation,
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| | Annuity Trust, properties are sold
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| and create a lifetime of income from the
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| | through the trust and capital gains on
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| value in your property.
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| | real estate are deferred. You can use
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| How a Private Annuity Trust Works
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| | your lifetime income stream to fund your
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| When an individual sells a property, he
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| | retirement, invest in another property on
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| or she is responsible for paying the
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| | your own timeline, or use them any other
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| capital gains tax on the sale within a
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| | way that you see fit, all while Trust
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| number of months. However, the rules are
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| | assets have the opportunity to grow, are
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| different for a Private Annuity Trust.
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| | protected from creditors and lawsuit
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| By transferring title of your property
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| | judgements, and taxes are deferred.
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| into a Private Annuity Trust, and having
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| | If you've spent your valuable time
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| the Private Annuity Trust sell the
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| | researching investments, fixing up
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| property to the new buyer, you receive a
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| | properties, and managing the stress of
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| contract that will pay you lifetime
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| | the real estate game, you certainly don't
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| income and are thus able to defer up to
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| | want to lose almost a third of your
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| 100% of your large capital gain over your
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| | profits to the federal and state
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| entire lifetime.
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| | government. You've most likely planned
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| Through the trust, the capital gains tax
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| | your future, your goals, and your dreams
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| is deferred until the time that payments
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| | around the money you thought you'd have
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| are made to you. Because the Trust issues
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| | when you sold your properties and losing
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| a regular stream of payments over your
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| | a chunk of it can be depressing, to say
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| entire lifetime, the taxes owed are also
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| | the least.
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| divvied up and paid in small increments
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| | If you've been putting off selling your
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| over time. Additionally, the money in
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| | assets in an effort to avoid paying
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| the trust is invested in a conservative,
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| | capital gains on property tax, you owe it
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| diversified portfolio until the moment it
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| | to yourself to talk to a professional
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| is paid out.
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| | about a Private Annuity Trust and see how
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| How is the Private Annuity Trust
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| | this strategy may work with your
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| Different from a 1031 Tax-Free Real
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| | particular situation.
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| Estate Exchange?
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