Increase Income While Giving

Sam and Mary were age 55 when they purchased some development land outside of town.  They thought it would be a good investment that they could later sell for a higher price.

Over the years, the development from the town has moved toward the property and their land is now next to a large commercial store.  They now rent the property to the commercial store and it is used for overflow parking.

They decided it would be nice if they could sell without paying a large tax.  Their tax advisor has told them that if they were to sell, there would be a large capital gains tax.  They also felt they could use some tax deductions this year.

The good news is that Sam and Mary can use a special trust to receive three very nice benefits.  The benefits are:

  • Bypass capital gain
  • Increase income
  • Charitable deduction

Sam: We are delighted with our special trust.  The trust has a name and is called a unitrust.  With our unitrust, we saved about $36,000 in capital gains tax and almost $18,000 in income taxes.  That is over $54,000 in tax savings!

Mary: Plus, we increased our income.  The land was producing almost no income before.  Now, we receive over $12,000 in income each year.  This increased income is one of my favorite parts of the plans. 

Ultimately, of course, the remainder will go to their favorite charities, and that feels good, too.

 

We are planning for our resident's futures...are you planning for yours?

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