Capital Gains Bypass

How to Give Your Money Away and Still Have It

You bought a parcel of real estate years ago or you bought stock in a growing company back in the 80's. Or maybe you started a company that prospered. However you did it, you now have something that is worth a lot more than you paid for it. If you sell it the capital gains tax will take a large share or the profit and while you don't mind paying a fair share or reasonable taxes it really galls you to have to pay such a large amount to the government because you were successful at what you did.

Perhaps you don't have to pay; perhaps there is another way. A way in which you can save taxes, pass on just as much to your heirs, have money to live on, and have the satisfaction of helping your favorite church or charity!

The CAPITAL GAINS BYPASS TRUST can do all these things for you. Technically known as the Charitable Remainder Trust, it works like this. You create a Charitable Trust and you fund that trust with the appreciated property. The Trust sells the property and receives cash, which it invests. There is no capital gains tax on the trust's sale of the property. You have made a charitable contribution so that you get a charitable deduction on your income tax (which you can carry over for five years). The trust pays you an income on at least an annual basis that you can count on. (You can extend the term of the income for some other family member but that will greatly lessen the tax deduction.) When you die the charity you selected gets the rest of the principal in the Trust. If you want your heirs to receive the same amount you create a WEALTH REPLACEMENT TRUST and fund it with a part of the annual payment to you and on your death they receive the money with no income or estate tax due.

Under one scenario, it you gave, for example, $250,000 of property to your CAPITAL GAINS BYPASS TRUSTS, and you and your spouse were both sixty-five years old, you could receive an immediate $50,945 tax deduction and an annual income of $23,389. At the second death the charity would receive $344,764, and if you had set up the WEALTH REPLACEMENT TRUST, your heirs would receive $250,000 tax free. If you had left them the $250,000 the estate tax could start at 37%.

For more information, click on the "CONTACT US" button or call 1-800-354-PLAN.