Capital Gain Tax Strategy

Selling a Big-Ticket Asset? Here’s How to Save a Fortune in Taxes

Our firm prides itself on research-driven accounting solutions. In other words, we spend a lot of time poring over obscure tax laws and court cases to uncover valuable tax strategies – methods that could save our clients tremendous amounts of money.

One such example is our discovery of a creative solution to defer capital gains taxes on the sale of major appreciated assets. In 2014, we were one of the first CPA firms (if not THE first) in the DFW area to offer this strategy to our clients, and we can help you take advantage as well. 

Here is a brief overview:

Direct Sales Kill Your Profit

Let’s say you want to sell a major asset such as a real estate property or your family business. You acquired the property or started the business 20 years ago for $1 million, and since then it has appreciated to a value of $5 million – a profit of $4 million. That’s great news, until selling it triggers the biggest tax bill of your life. In Texas, you’ll usually lose 23.8 % of the profit (that’s 20% capital gains tax plus the 3.8% “net investment income tax”), amounting to $952,000 in this case. In other states that have a state capital gains tax, you could lose a third or more of your hard-earned gains.

Conventional Strategies Fall Short

In situations like this one, some accountants may steer you toward well-known tax-avoidance strategies such as charitable trusts or Section 1031 exchanges. The problem is, these strategies also require you to give much of the proceeds to charity or reinvest in assets you may no longer want. Not exactly a big win.

Have Your Cake and Eat it, Too

Now there’s a way to cut the taxes to as little as 6.5%, AND enjoy the proceeds however you see fit. It’s a prime illustration of how a knowledgeable, innovative CPA can make a major contribution to your personal prosperity. Call us today to find out if this strategy would work for you.