Thank you!
We will contact you shortly
Advanced Tax Planning Strategies
Federal Tax Planning Services
When it comes to advanced tax strategies, it is important that you hire advisors who are familiar with these concepts which often involve adhering to special rules & regulations published by the IRS. We work with many experts throughout the country who specialize in these techniques to help our clients defer, postpone, or even eliminate federal taxes.
Tax Planning & Advisory Lawyers
Need assistance with Asset Protection, Real Estate Property Exchanges, Statutory Trusts, or another advanced tax planning service? We may be able to help. Scheduling a free consultation is easy for any of our specialized services below.
Asset Protection & Tax Shelter Trusts
If you are selling a business, a piece of real estate or some other capital asset, a specially drafted trust will protect your assets from creditors and allow you to shelter taxes for generations to come. These types of techniques are very specific to the transaction and can vary on a case-by-case basis.
Select Executive Benefit Arrangement (SEBA)
The Select Executive Benefit Arrangement or SEBA is a welfare benefit, death benefit only plan, that enables organizations to retain key executives and management staff by providing a death benefit for these employees. Should the organization choose to fund the Plan solely by salary reduction, it will not be required to make any contributions; the costs it incurs are limited to one-time legal and actuarial fees and annual administrative charges. The IRS and DOL permit the use of salary reduction to fund the Plan at less cost and with fewer administrative and compliance requirements compared to other executive benefit plans, such as deferred compensation or a qualified plan.
Charitable LLCs & Other Charitable Planning
If you are a high-net worth individual looking for additional tax savings AND you have charitable intentions, you can consider various charitable entities to meet your objectives. One of the newly emerging areas is the use of LLCs (limited liability companies) in this area. A “charitable” LLC is not actually a non-profit entity approved by the government. Only a corporation can be an approved 501(c)(3) organization. However, sophisticated planners are using LLCs to meet charitable objectives of their clients and avoid the constrictive and onerous rules imposed on nonprofit corps. Certain wealthy individuals (Mark Zuckerberg has most recently made the news) are contributing money into an LLC and the LLC will manage and distribute to chosen charities. The members of the LLC will not receive an income tax deduction until monies are actually paid to the charity. But, if a group of individuals wish to pool their resources and have aligned goals and objectives, an LLC might be an easier way to set up the arrangement.
For those who want to “have their cake and eat it too”, consider an aggressive approach that combines the LLC with a partner-owner charity to obtain a current tax deduction and other tax benefits along with way. Contact our office to further discuss these and other advanced techniques.Offshore Insurance Programs & Other Private Alternatives
In today's complex and ever-changing financial landscape, securing the right insurance can be a daunting task. Whether you're a business owner looking to protect your assets or an individual seeking customized coverage, understanding the nuances of offshore insurance captives and other private insurance alternatives can open up new avenues for effective risk management. This guide will help demystify these options and explain how they can benefit you. Read further or contact our office for a free consultation.
1031 Real Estate Property Exchanges
A 1031 exchange gets its name from Section 1031 of the U.S. Internal Revenue Code, which allows you to avoid paying capital gains taxes when you sell an investment property and reinvest the proceeds from the sale within certain time limits in a property or properties of like kind and equal or greater value. So if you own commercial or investment grade real estate and are looking to sell, consider a property exchange which allows you to sell your property and purchase a new one and avoid capital gains taxes. But there are many rules and regulations that must be followed to qualify for 1031 “like-kind” treatment. Be sure to contact our office before making any decisions, listing property for sale or entering into any sales contract.
Delaware Statutory Trusts
A Delaware statutory trust (DST) is a legally recognized trust that is set up for the purpose of business, but not necessarily in the U.S. state of Delaware. It may also be referred to as an Unincorporated Business Trust or UBO. Delaware statutory trusts are formed as private governing agreements under which either (1) property (real, tangible and intangible) is held, managed, administered, invested and/or operated; or (2) business or professional activities for profit are carried on by one or more trustees for the benefit of the trustor entitled to a beneficial interest in the trust property.
DST Investments are offered as replacement property for accredited investors seeking to defer their capital gains taxes through the use of a 1031 tax deferred exchange and as straight cash investments for those wishing to diversify their real estate holdings. The DST property ownership structure allows the smaller investor to own a fractional interest in large, institutional quality and professionally managed commercial property along with other investors, not as limited partners, but as individual owners within a Trust. Each owner receives their percentage share of the cash flow income, tax benefits, and appreciation, if any, of the entire property. DSTs provide the investor the potential for annual appreciation and depreciation (tax shelter), and most have minimum investments as low as $100,000, allowing some investors the benefit of diversification into several properties.
The DST ownership option essentially offers the same benefits and risks that an investor would receive as a single large-scale investment property owner, but without the management responsibility. Each DST property asset is managed by professional investment real estate asset managers and property managers. It used to be that only large institutional investors such as life insurance companies, pension funds, real estate investment trusts (REITS), college endowments and foundations were able to invest in these properties. Now as a viable 1031 exchange replacement property option through a DST, individual investors have the ability to invest in a diversified selection of institutional quality, investment property types that they otherwise could not purchase individually. DST Investments are located throughout the United States. Property types may include multifamily apartment communities, office buildings, industrial properties, multi-tenant retail, student housing, assisted living, self-storage facilities, medical office, single tenant retail properties and others .Monetized Installment Sales
Monetized Installment Sales (M453 Transactions) also known as “collateralized installment sales” or “C453 transactions” are based on Section 453 of the IRS Code. This planning approach uses a third-party dealer in capital assets to defer sale proceeds (and the tax on those proceeds) for lengthy periods of time. Because it does no good to defer taxes if you do not have access to the funds, this strategy includes a monetizing loan to provide liquidity during the installment period.
This strategy works for sales of assets that are eligible for installment sale treatment under IRS Code §453. These include privately-held business entities and assets, business and investment real estate of all kinds (business, investment, personal residences, fractional interests), as well as tangible assets like collectibles, yachts, and airplanes. However, they don’t include sales of business inventory except as part of the sale of the entire business, and they don’t include “dealer” assets which you buy for resale in the ordinary course of your trade or business, or publicly-traded securities. Monetized Installment Sales can also be used to “rescue” failing 1031 exchanges. Contact our office for more information and for a free analysis of your transaction.Dynasty Spendthrift Trusts (complex trusts)
One way to eliminate capital gains is through the use of a complex trust. Trust accounting is different than the more commonly used generally accepted accounting principles, and the distributable net income is calculated in a different manner when using a complex trust. When trust documents are implemented properly, you can effectively transfer control of assets from one person to another without triggering a taxable event.
Taxation follows ownership, and a trust system can provide you control without ownership. This will allow you to eliminate capital gains in an efficient way without looking for the latest loophole or deferring the taxes. A properly set up complex trust allows you to avoid capital gains tax and also eliminates probate and inheritance taxes at the same time, while also increasing your tax efficiency overall.
However, complex trusts are not an option for everyone. They can be costly to set up and often have large liquidity requirements — in some cases $5 million. This makes complex trusts a good fit for business owners who pay more than $200,000 per year in taxes, high net worth individuals and family offices that are looking for tax efficiencies, rather than for people who earn W2 income. The system also has many rules and regulations you must learn to ensure you are fully compliant.
There are many tools for minimizing or deferring your capital gains, but a properly established complex trust can allow you to have a more efficient tax structure, not only for capital gains but also for wealth transfer. Contact our office for more information or to arrange a free consultation to discuss your options.
Are Advanced Tax Strategies Right For You?
Taxes Can Be Minimized With Some Planning Ahead
When it comes to advanced tax strategies, it is important that you hire advisors who are familiar with these concepts which involve adhering to special rules & regulations published by the IRS. You usually need to plan ahead and not look to tax avoidance last minute. It is often too late. We work with many experts throughout the country who specialize in these techniques.
Shared General Counsel
Most small business owners cannot afford (nor does it make financial sense) to hire their own general counsel, devoted exclusively to their company. But legal issues come up fairly regularly and advice about the law is always needed. Hiring attorneys on an “ad hoc” basis does not allow counsel to have a real understanding of the structure of your company, history of dealings, agreements in place, employees, etc… And it always costs more (and sometimes gets you worse results) for the ad hoc lawyer to spend time going through your situation. The term “fractional” general counsel applies to a lawyer who, for a flat monthly fee, interacts and understands your business dealings on a regular basis. Generally, this results in less cost and minimizes any “emergency” legal issues.
Hire our general legal counsel for your business and your family for a flat monthly fee. Click below to learn more about our retainer services, along with their respective monthly fees.
Why Work with Our Law Firm?
With more than 30 years of experience drafting thousand of documents and handling hundreds of transactions, we have knowledge and expertise that would take you a lifetime to develop. So if you’re a small business owner, professional or executive, you’ve come to the right place. We are also proud to be recognized by our industry colleagues.
What Our Clients Say
Advanced Tax Strategies FAQ'S
What is the purpose of tax planning?
They say that taxes are voluntary. Basically, this means that you are allowed to plan and position your assets, in accordance with the tax code and related IRS rulings to minimize the taxes you pay on your income, on the sale of your assets and on your estate. Tax planning is this process and advanced tax planning employs strategies to minimize taxes on the sale of large capital assets and for high income earners.
Is it legal to defer taxes using these strategies?
Some strategies are based on written sections of the tax code such as 1031 real estate exchanges or charitable planning. Others are based upon a more abstract reading of IRS regulations, private letter rulings and legal decisions. For those more “aggressive” strategies, you should always obtain a written legal opinion to support your position in the case of an audit or other contests by the IRS or state authorities.
Is it costly to use these techniques?
Costs vary from strategy to strategy and some strategies do not make financial sense unless you are deferring $500,000 or more in tax. We are always available to have a case-specific discussion and do some preliminary calculations to help you with your decision-making.
Ready to work with us?
Schedule a free initial consultation today with our experienced Business & Estate lawyers at Beinhaker Law.
Simply send us a message or schedule a 30min meeting.