As of August 2021, because Capitol Hill has yet to agree on funding, the timeline is still anyone’s guess. In the Green Book, which is the White House’s policy wish list, their goal is to increase long-term Capital Gains significantly. Even though we can’t speak to the timeline yet, tax increases are top of mind for most business owners due to the proposed increases. From the standpoint of gifting assets, the timeline to complete the process by the end of the year is very close. Valuation firms, attorneys, and other key advisors required to complete the [...]

Currently, as of August 2021, the Lifetime Gift Tax Exemption for each individual is about 11.7MM per person, which is the highest in history. This means a married couple could gift about $22.7MM to the next generation tax-free. However, based upon the White House’s wish list of how to fund the infrastructure and other government funding items, they propose cutting the Lifetime Gift Tax Exemption in half.  As a result, taking advantage of the Lifetime Gift Tax Exemption before the end of the year is of high urgency. In this episode of the “What’s Up [...]

Currently, as of August 2021, a 1031 exchange allows a taxpayer to avoid paying capital gains taxes when selling an investment property by reinvesting the proceeds from the sale, within specific parameters, into another property(s). Up until now, this part of the tax code has been helpful to those selling and buying real estate as they are not burdened by the taxes on something they do not have any cash flow from since they rolled over those funds. Like the Lifetime Gift Tax Exemption, the 1031 Exchange is part of the White House wishes list [...]

Making gifts and considering changes in tax law is one piece of the succession planning puzzle. When working with business owners, we often find that they have had some of the best tax planning money can afford. However, when designing the plan, they let the “Tax Tail Wag the Dog” and did not think about how it would impact next-gen motivation, family harmony, and positioning the business for success. Listen in as Jeff Bannon, a succession planner with The Rawls Group, and Kevin Gilbreath, a tax partner with Crowe, share what smart business owners do [...]

In our experience, business owners like to stay in control, in control of their business, real estate, and future.  So, when we talk about giving something away, we generally get pushback from our clients.   Ultimately, the goal from a tax perspective; is to keep as much of the wealth and equity within the family and minimize what Uncle Sam takes.  There are mechanisms available if you are an S-Corp or LLC that allow you to transfer just about all of the equity without giving up control. Listen in as Jeff Bannon, a Succession Planner with [...]

Many don't realize, but yes, an asset can be sold and you can avoid Capital Gains tax by leveraging an Intentionally Defective Grantor Trust, also known as an IDGIT.  An IDGIT is a strategy for family businesses who want to keep the company in the family, with no interest in selling the business long-term, to get the business outside of the estate into an irrevocable trust without using Gift tax exemption. But, as you would expect, there are nuances which Jeff Bannon, a succession planner with The Rawls Group, and Kevin Gilbreath, a tax partner [...]