Structured sales of real estate, or as I prefer to call them, guaranteed and secured installment sales, have been seeing a surge of interest as baby boomers begin a massive conversion of real estate assets into financial assets as they approach retirement.
What do you need to know in 2019 under the new tax rules and rates to make this safe, secured installment sale work for you by spreading out capital gains taxes and putting 100% of your sale proceeds to work for you?
Let me give you the THREE key points for you to consider if you are selling real estate, business property, a closely held corporation of any other capital asset this year.
1. THERE IS A NEW MAJOR PLAYER GETTING READY TO ENTER THE STRUCTURED INSTALLMENT SALE MARKET.
While I won't steal the thunder of the life insurance company that has announced they are going to enter the structured sale market in early 2019, suffice it to say it is a major brand name and represents a dramatic upgrade in the options for investors large and small. If you have a property you are selling in 2019 make sure you call or email my office ( my contact number is on the screen and will be on the end of this video as well) so that I can inform you when this company is commencing new business operations in structured sales.
2. THE NUMBER OF DEDUCTIONS AND WRITE OFF'S FOR HIGH INCOME TAX PAYERS HAS BEEN REDUCED SO DEFERRAL OF A BIG TAX HIT IS STRATEGICALLY SMART.
A lot of people in the US are having the uncomfortable realization that tax reform, for high net worth or high income earners, has radically reduced the number of deductions, exemptions and write offs. The net result is more of your income is exposed to the highest rates of taxation. Taking a big hit on the taxes due after the sale of property, then trying to "catch up" with earnings to get back to that net sale figure before you paid taxes, well, it's almost impossible if you do the math. Spreading out your tax due over years or decades, with 100% of your funds invested makes a great deal of sense now and you need to see if this option works in your particular case.
3. MORE PEOPLE THAN EVER REALIZE THAT THEY CAN NOT AFFORD STOCK AND BOND MARKET RISK WITH THEIR SALES PROCEEDS AND ARE REALIZING THE VALUE OF GUARANTEED CASH FLOW THEY CAN REINVEST.
While everyone likes to talk about their ability to tolerate market risk and volatility, the fact is if you have a big chunk of cash for a property sale, have it in the market and we see a 15% to 20% market decline, you are going to be pretty miserable about that loss.
As people move to retirement they need GUARANTEED cash flow that shows up every month, on time, in the account and is not subject to market volatility or risk. Remember, you can always reinvest your monthly proceeds into the market if you choose, on a dollar cost average basis, and not expose your entire proceeds to bad luck and bad timing if a market decline occurs.
We have new major markets coming into play to guarantee payments and simplify the process of a guaranteed installment sale, which coupled with the reality that most people want to avoid higher taxes and lock in guaranteed income, makes this structured sale option more attractive than ever.
If you are considering this technique, I encourage you to call and speak to us and see if this makes sense for you. It's no pressure, the call and consult is free and it is our firms pleasure to assist you in this important decision. For more assistance and information go to: http://wahlstromandassociates.com.