Challenge

Selling a high-value, low-basis asset means a substantial capital gains tax bill for your
client. They’ll be looking at up to 23.8% on the appreciated amount federally, plus
heaven knows how many percent more in state tax. For owners selling a business, the tax
problem can be even more challenging. Sale of equipment, accounts receivables and
inventory, for example, are taxed as high as 39.6% federal plus state.

Solution

If the asset being sold is debt-free, a charitable trust can do something an individual can’t
― eliminate the taxes. The owner can take advantage of a specially designed charitable
trust and receive these benefits:

• Eliminates the capital gains taxes entirely
• Receives added income tax savings
• Receives five equal payments over a 4¼ year period approximately 98% tax-free
• Benefits a charity of your choice

This planning approach is applicable to the sale of most any highly appreciated debt-free
asset, including:

• Real estate – Commercial, Investment Property, Land – Even Principal Residences
• C-Corporations and S-Corporations – including professional practices (Medical, Dental,
  Chiropractor etc.)
• Partnerships, Partner Buyouts, & LLC’s
• Privately held and Publicly held stock
• Collectables – Art, auto, and antique collections
• And many more…

Key Benefits

• Capital gains and other taxes are eliminated
• Seller receives tax-advantaged distributions over 4¼ years with all proceeds controlled
  by the Seller.
• Provides a true exit strategy and does not require the purchase of “like-kind”
  replacement property like in a 1031 Exchange

Qualifications

• Most capital assets with a selling price of $400,000 or more with no maximum
• Sellers of appreciated assets who desire a true exit strategy
• Any seller facing a substantial capital gains tax obligation at closing, depreciation
  recapture on real estate or pre-payment of an installment debt
• Sale of businesses including accounts receivables, inventory and equipment, and
  depreciation recapture on equipment

IRS Codified

• Available per Federal tax law since 1969