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Re: taxes on land sale
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Posted by John T on September 28, 2006 at 15:28:44 from (66.244.90.5):
In Reply to: taxes on land sale posted by centmo on September 28, 2006 at 14:19:25:
centmo, I passed the Indiana State Bar Exam the first go around which included some Tax Law, BUT IT AINT MY THING and I dont practice in the area. That being said, ways which can help spread the burden are to receive the payment over some years, but at their age I dont see that as a great option, although the standard installment land sale contract would bind the successors heirs and assigns. Other things that may help reduce capital gains tax are if they reinvest within a certain time but again, at their age that may not be feasible either. I do some small estate planning work and advise my clients as they get older theyre better off not having many assetts cuz its just something bill collectors can atatch in the event they run up some huge debts. Then theres the look back period concerning spend down as far as their giving funds to children n grandchildren etc, but they are allowed to give so much per year without harsh tax consequences. Again, Tax Law aint my thing but I dont see too many great things they can do now as far as avoiding capital gains taxes but they should plan ahead now to divest themselves of assetts to children etc in such a manner (so much per child per year etc) to reduce tax liability. They need to do things like funeral trust funds and other trust instruments concernign the time of their passing. What they need to do is minimize their "probate estate" with instruments such as Pay on Death (POD) or Joint Tenancy with rights of survivorship accounts on savings, checking, CD and Stocks etc and similar concerning ownership of real estate such that the named Co Tenant acquires title by operation of law upon their death taking it outside of the probate assett pool. Basically, do as suggested and get a local (who knows your states laws) CPA and/or Tax Lawyer cuz what they charge you will gain many times over as far as complex tax avoidance is concerned.
John T, Retired Engineer now a Country Lawyer, but NOT a Tax Lawyer for sureeeeeeee
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