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Income Tax Planning

Income Tax Planning

The goal of income tax planning is to manage assets to minimize taxes.  This can be done by properly structuring asset sales or purchases, taking advantage of available tax credits and tax deductions, managing one’s assets with knowledge of advantageous tax laws, timing receipts and disbursements and even reducing taxable income through retirement planning and creating entity structures for you business ventures.   Guaranty's Wealth Management Group has a team of attorneys and financial professionals available to assist our clients review their income tax issues and make well reasoned recommendations for our clients to consider with their other professionals.    Mt. Pleasant, Texas

What is a 1031 Exchange?

A 1031 Exchange is an income tax deferral technique under the restrictions of Section 1031 of the Internal Revenue Code (“IRC”).  This IRC Section can offer an opportunity for real estate owners to defer the capital gains tax liability associated with the sale of investment or business property. To qualify for 1031 "like kind" property exchange the entire transaction has to be done in accordance to the detailed rules, regulations and compliance issues set forth in the US (IRS) tax code. 

How does the taxpayer set up an exchange?
The exchange must be set up before the Taxpayer can close on the sale of the Relinquished Property. The Qualified Intermediary prepares an Exchange Agreement and an assignment document to assign the Taxpayer’s rights in the sale contract to the Qualified Intermediary. The Taxpayer and the Qualified Intermediary sign the Exchange Agreement and the assignment document. The Buyer of the Relinquished Property also signs the assignment document. If a Qualified Escrow is being used the Qualified Escrow Agent also signs the Exchange Agreement. The Qualified Intermediary or the Qualified Escrow Agent holds the executed Exchange Agreement. The executed assignment document is delivered to the escrow agent handling the sale of the Relinquished Property. Once the sale escrow agent gets the assignment, and all other terms of the sale are satisfied, the sale escrow can be closed. Upon close of the sale escrow the sale escrow agent transfers all of the Seller’s net proceeds to the Qualified Intermediary or to the Qualified Escrow. 

Click here to learn more about a 1031 Exchange.

Trust Tax Reporting
In addition to reporting to the beneficiary, a trustee has a duty to file tax returns with the IRS and sometimes various state taxing authorities. There are several areas in which tax reporting may be required. Click here to learn more about tax reporting requirements.

The American Taxpayer Relief Act of 2012
The American Taxpayer Relief Act of 2012 impacts many of our clients and our team at Guaranty's Wealth Management Group invites you to visit with us so we can jointly review your current income tax planning and discuss how these changes may impact your current planning.

For a brief overview of the income tax provisions of the American Taxpayer Relief Act of 2012, please click here.

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