T A C I T A strategy for reducing income taxes in 2014 Tax deduction for you Avoid capital gains Charitable contribution Income for life or Tax-free passing of assets to your heirs Prepared by Elliot Goldberg Registered Investment Advisor eg@goldata.com Goldata Financial (610) 999-3599
The purpose of this presentation is to demonstrate how the TACIT strategy may benefit the reader. This information is believed to be true and is subject to change. THIS PRESENTATION IS NOT INTENDED TO SERVE AS A PROJECTION, PREDICTION OR ANY TYPE OF LEGAL OR TAX ADVICE OF ANY KIND. Please contact your lawyer, accountant and other professionals to see if this strategy is right for you. Questions? Call Elliot at (610) 999-3599 2
Is this you? Benefit from a Tax-deduction this year Benefit from Avoiding the capital gains tax on selling an appreciated asset Support a Charity Receive monthly guaranteed Income for life or pass a portion of your estate to your heirs income and estate Tax-free Questions? Call Elliot at (610) 999-3599 3
Then T A C I T may benefit you! Tax deduction for you Avoid capital gains Charitable contribution Income for life or Tax-free passing of assets to your heirs Questions? Call Elliot at (610) 999-3599 4
1. 2. 3. Your lawyer sets up a Charitable Remainder Trust (CRT) to receive your appreciated asset You donate your appreciated asset to the CRT and receive a charitable tax-deduction for the current year and avoid the capital gains tax on the appreciated asset The CRT sells the appreciated asset for full market value and pays no income tax on the gain Questions? Call Elliot at (610) 999-3599 5
4. OR Bob Bob wants guaranteed lifetime income The CRT purchases an annuity that will provide monthly income to Bob for as long as he lives Judy Judy wants to pass on assets to her heirs income tax and estate tax free The CRT purchased an annuity that will provide Judy cash to purchase a guaranteed benefit life insurance policy on herself naming her heirs as the beneficiary Upon her death, the life insurance proceeds pass to her heirs income tax and estate taxfree Questions? Call Elliot at (610) 999-3599 6
For Income production Bob, age 65, bought 5,000 shares of ABC stock a few years ago for $10 per share. The current price is $100 Bob s lawyer sets up a Charitable Remainder Trust (CRT) Bob transfers the 5,000 shares of ABC stock to the CRT Bob gets a current year charitable tax deduction of approximately $206,000 Bob pays no capital gains tax on the transfer CRT buys an annuity that pays Bob $28,000 per year for Bob s lifetime Charity receives remainder of trust assets upon Bob s death The $500,000 of ABC is no longer part of Bob s estate and is not subject to estate taxes Questions? Call Elliot at (610) 999-3599 7
Judy is age 50 and in good health Judy also bought 5,000 share of ABC a few years ago for $10 per share Judy s lawyer sets up a Charitable Remainder Trust (CRT) Judy transfers 5,000 shares of ABC stock to the CRT Judy gets a current year tax deduction of approximately $197,000 Judy avoids paying the capital gains tax on the appreciation of ABC stock CRT buys an annuity that pays $45,000 annually to Judy for the next 10 years Judy uses $25,000 of this annual payout to buy a guaranteed benefit life insurance policy. Judy s heirs will receive over $1,100,000 income and estate tax-free After 10 years, the CRT is dissolved and the charity receives the remainder. The insurance policy is fully paid up The $500,000 is not part of Judy s estate and is not subject to estate taxes Questions? Call Elliot at (610) 999-3599 8
What are my income options? You can receive a fixed amount or a fixed percentage of the CRT assets annually. Do I have to take the income now? No. You can set up the CRT now, take the income tax deduction in the current year and postpone taking the income until later. Who can receive the income from the CRT? The income can be paid to you, the survivor of you and your spouse, your children or any entity you decide assuming the CRT meets certain requirements. Gift and estate taxes may apply. What are the best assets to donate? The best assets to donate are those that have significantly appreciated in value since their purchase. Can the donor be the trustee? Yes. Can I change the trustee? Yes. You can change the trustee as long as you are alive. Can I change the charity? Yes. Is this all I need to know? No. A meeting with your tax professional, investment advisor and estate lawyer is strongly suggested. This will allow them to answer your specific questions based on your financial goals and customize your CRT to your needs. Questions? Call Elliot at (610) 999-3599 9
Elliot Goldberg, Goldata Financial s principal, is a Registered Investment Advisor who helps individuals and families use safe, guaranteed* investments that generate a reasonable rate of return to help meet current and/or future income goals. Every client is unique and their circumstances, timetables and goals are also unique. Elliot will sit down with you and develop a custom plan for helping you meet your current and/or future income goals. Questions are always encouraged and continuing communication is a great way to make sure your custom plan continues to meet your goals. If you like the idea of safe investments to help meet your current and/or future income needs, please call Elliot Goldberg at (610) 999-3599 or email him at eg@goldata.com. *Guaranteed by a life insurance company Questions? Call Elliot at (610) 999-3599 10