There are a at least dozen ways to reduce, defer or eliminate capital gains. Most people only know about 1031 exchanges and charitable remainder trust;learn about the rest.
Become familiar with the breadth and depth of alternatives to paying the tax. For some clients the best decision is to pay the tax. But most clients will really appreciate the time you spend helping them to understand the many ways to reduce, defer or eliminate a capital gains tax. Planning in advance is, of course, best. But even taking action after the gain has occurred is possible and profitable.
The underappreciated economic importance of a 30 year deferral.
Maintaining dictatorial control using a children’s trust. Sections 453(e), 453A and 754.
The federal and state 40% economic substance doctrine penalties.
Structures sold on the internet.
The importance of planning far in advance, sometimes years in advance.
The structures you can do even after a sale has occurred that will reduce the tax in attractive ways.
CPAs and financial professionals interested in helping their clients reduce, defer or eliminate capital gains taxes which at 33.3% or 37.1% are larger than most clients recognize.
There are no prerequisites other than understanding the tax rates that apply to capital gains: 20% federal; 3.8% net investment income tax if you do not materially participate, e.g.,. the sale of “C” corporation stock or your residence; and 13.3% state of California.
Review the $5,000,000 per person installment sale limit of IRC Section 453A.
Review the 40% economic substance doctrine penalty of IRC Section 7701(o) and 6662(b)(6).