Mark Wahlstrom of http://wahlstromandassociates.com/ talks about the topic of whether a professional practice can be sold and how to take advantage of a structured installment sale so as to spread out a tax hit and lock in cash flow as lawyers, accountants, doctors, and others start to retire and transfer their professional practices. For more on this story: http://www.thesettlementchannel.com/.
As the “boomer generation” of lawyers, accountants, doctors and other professionals look to transition toward retirement, one of the biggest issues facing many of them is how to sell their professional practice and not be hammered with a ton of capital gains taxes.
Well the good news is that the same technique used for the sale of real estate property, the structured installment sale, can also be used when selling a professional practice.
Check out this video that gives you some key elements to consider, such as your choice of business entity and whether is qualifies as a capital asset, the choice of funding and guarantee options available, as well as how to spread out the tax hit and reinvest the proceeds over time to further secure your financial future.
In this weeks edition of Speaking of Settlements, I review the concept of structured sales, updated for 2013 and the market and tax issues we are facing this year. In this brief tutorial I look at the issue of how a structured sale works, the benefit of tax deferral and putting 100% of the proceeds of a real state sale to work vs paying a huge tax bill on the sale of appreciate real estate.
Structured sales, the key to major tax savings on the sale of appreciated real estate.
In the process of a structured sale there are a few key items you need to watch out for given the issues we face in 2013:
Have you notified the buyer of the property of your intention to structure your sale and provided them the necessary paperwork, information and process that they will need to sign off on to make it work.
What funding options do you have for your structured sale? As mentioned in our earlier commentary, the recent decision by Allstate Financial to close their structured settlement division has left a void in the annuity funding option for structured sales. Do you want to wait for a life market to enter the arena or does it make sense to look at private funding options through other assignment companies?
What are you trying to achieve with a structured sale? Is it about just moving money from one tax year to the next, in which case we argue you should NOT be using this process, OR, are you seriously considering a long term cash flow plan using 100% of your proceeds so that your tax hit is spread over many years and is integrated into your business, financial or estate plan?
Regardless of your situation, we think you need to stay current on structured sales, know how they work and what you need to do to make them part of your real estate selling strategy. Subscribe to our page, like us on Facebook or simply watch these posting for more information during 2013 on the topic of structured sales.
Ok, if you are a trial lawyer and last week you had a painful conversation with your CPA or tax professional about the amount of tax you owed, or how depleted your retirement account is, then you absolutely need to contact my office and learn more about some options only available to trial lawyers.
This weeks edition of Speaking of Settlements gives you a quick look at how trial lawyers and litigators can accomplish the following:
Convert taxable income into fully tax deductible income by taking advantage of structured legal fees and certain retirement plan options.
Remove all market risk from your retirement planning and know in advance exactly how much retirement income you will have at a certain age, regardless of market performance.
Cut your current tax bill by the tens or hundreds of thousands of dollars by doing some very basic and simple advance planning.
As I state in the video, this is not some esoteric plan that is going to give your CPA a heart attack or keep you up at night wondering when the IRS is going to knock on your door. No, this is plan that is based on long standing tax law and principals that allow trial lawyers to defer their taxable income into future years, guarantee those payments and then direct them into exceptionally conservative guaranteed benefit retirement plans.
It's a basic plan, it works like nothing else in the financial community but you have to speak with an expert BEFORE your case settles in order to take full advantage of it.
If your tax bill is killing you and your retirement plans are a mess, please contact my office at Wahlstrom & Associates and lets talk about how you can begin to clean up this disaster. Lets face it, the last few years have been hard on trial lawyers bank accounts, but you have a chance to fix it and get control over your finances if you simply plan ahead and systematically convert some of your current legal fees into guaranteed future income.
You only have yourself to blame if you are paying too much in taxes and your retirement plan is something that keeps you up at night. The solution is staring you in the face, you just have to get educated and put the plan in motion.
