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Domestic Non Grantor Trust | Ultra Trust | Sale Agreement | Engineered Capital Gains Transactions | SAM/SAL | Charitable Remainder Trust | Charitable Lead Trust


ENGINEERED CAPITAL GAINS TRANSACTIONS

Click here to view charts of Engineered Capital Gains Transactions

“THE ULTIMATE TRANSACTION
Narrative Revised 02/10

This is a program that has been in use for a number of years. This program uses a number of elements.

The purpose of this program is to:

A) Eliminate capital gains taxes
B) Retain control over the value of the appreciated assets
C) Eliminate probate and estate taxes
D) Gain asset protection for the assets in the program
E) Possible generation of a tax free stream of income
F) Possible leverage of the net value of the assets many times.

The elements in the program are:

1) Client
2) Appreciated asset
3) Limited Partnership
4) Limited Liability Company
5) Intentionally Defective Grantor Trust (Ultra Trust)
6) Qualified charity (Under certain restrictions, could be a family foundation)
7) Life insurance.

Here is how the program works (Corresponds to flow chart):

Step 1   -
The client has an appreciated asset (stock, real estate, business, collectibles) that they wish to sell. We establish two entities. These entities are:
 
a) Limited Partnership. We use a Limited Partnership in this transaction because of its unique circumstances where the General Partner controls the Limited Partnership no matter how minor the General Partnership Interest may become,
 
b) Limited Liability Company. All Limited Partnerships must have a Manager. That Manager is called a General Partner. There are risks associated with being a General Partner so we form an LLC that holds very few assets to act as the General Partner. The Managing Member of the LLC, hence the person(s) controlling the General Partnership Interest, can be the client or a person(s) selected by the client.
 
Step 2   -
Now we move the General Partnership Interest in the Limited Partnership to the LLC. We move the Managing Member title for the LLC to the client or the person(s) they select. We trade the appreciated asset to the Limited Partnership for Partnership Interest (not a taxable event).
 
Step 3   -
Now we introduce to the transaction a qualified buyer. Note, for purposes of this transaction we have assumed a cash transaction. That does not have to be the case.
 
Step 4   -
The buyer purchases the appreciated asset from the Limited Partnership. The Limited Partnership, under the direction of its General Partner, makes a deferred charitable contribution to a qualified charity. This contribution is backed by restricted Limited Partnership Interest. Hence, at tax time the charity will get the 1099 or K1 for the gain.
 
Step 5   -
For asset protection, elimination of probate and estate tax planning we form an Intentionally Defective Trust (Ultra Trust). This trust must have an independent trustee. The beneficiaries of this trust are selected by the client. The trust at this point will own:

a) the LLC which holds the General Partnership Interest in the Limited Partnership which holds and controls the cash from the sale,

b) other client assets including their residence,

c) any Limited Partnership Interest that might exceed the amount of the capital gain.
 
Step 6   -
The Intentionally Defective Trust (Ultra Trust) purchases a life insurance policy. That policy, to the amount that is needed to pay the amount of the charitable contribution which was the amount of the capital gain, names the charity as a beneficiary.
 
Step 7   -
The life policy may be structured to provide the ability to borrow from the cash value -tax free -so long as the beneficial amount of the policy never drops below the amount needed to fulfill the promise to the charity. This policy does not have to be written on the life of the client so long as the life covered qualifies under the insurable interest rules.
 
Step 8   -
When the life covered under the life insurance policy dies: a) the amount of the previously determined capital gain is paid to the charity, b) any amount in excess of the amount needed to pay the promise to the charity reverts to the policy owner - the Intentionally Defective Grantor Trust (Ultra Trust), c) the charity returns the Limited Partnership Interest to the trust.

 

Additional Appreciated Assets

The client may use most of the established system to eliminate the gain on other appreciated assets. Please contact United Wealth for details and pricing.

What we have accomplished. We have:

I) Eliminated the capital gains tax to the extent that the charity is a Limited Partner
II) Eliminated probate and estate taxes on the value of the asset sold plus its growth
III) Maintained control of the value of the asset during the life time of the client and perhaps beyond
IV) Maintained the total control of the growth of the value of the appreciated asset after its sale
V) Created a vehicle where the trust, which owns the insurance policy, may generate tax free income to the beneficiaries of the trust -loans against the policy
VI) Gained a charitable gift deduction for the client’s estate for the value of the Limited Partnership Interest
VII) Eliminated probate and estate taxes on the client’s other assets that are titled to the Intentionally Defective Trust (Ultra Trust)

 


Click here to view charts of The Ultimate Transaction
Hosted by DatabyteCorp.com
United Wealth Protection Concepts, LLC - Vero Beach, FLORIDA FL
Home About Us Contact Us
Home
Asset Protection
Trust
Estate Planning
Tax Planning
International Planning
Program Inclusions
Short Profile
Resumes

Domestic Non Grantor Trust | Ultra Trust | Sale Agreement | Engineered Capital Gains Transactions | SAM/SAL | Charitable Remainder Trust | Charitable Lead Trust


ENGINEERED CAPITAL GAINS TRANSACTIONS

United Wealth Protection Concepts offers two different programs whose aim is to either reduce the capital gains tax paid or to shift the responsibility to pay the tax to an organization that legally has no recognition of a capital gains tax.

Superior Program

The concept behind this program is very simple:

Superior Program

The concept behind this program is also simple:

1) By reducing Line 37 of the client’s 1040 to below the point where the percentage of the gain tax increases from 15% to 23.8%,we save the amount of tax (8.8%) that without this planning would be paid.
2) Postpone the recognition of the payment of the gains tax through legal techniques that allow the amount, that which would have been paid in taxes, to grow through investments.

A word of caution - both of these programs take advantage of long standing tax reduction techniques. However, they both are technical in their design and should not be undertaken without the advice, counsel and direction of an organization that has the expertise to properly structure the transaction.
Click here to view charts of The Superior Engineered Capital Gains Transaction

“THE ULTIMATE TRANSACTION
Narrative Revised 02/10

This is a program that has been in use for a number of years. This program uses a number of elements.

The purpose of this program is to:

A) Eliminate capital gains taxes
B) Retain control over the value of the appreciated assets
C) Eliminate probate and estate taxes
D) Gain asset protection for the assets in the program
E) Possible generation of a tax free stream of income
F) Possible leverage of the net value of the assets many times.

The elements in the program are:

1) Client
2) Appreciated asset
3) Limited Partnership
4) Limited Liability Company
5) Intentionally Defective Grantor Trust (Ultra Trust)
6) Qualified charity (Under certain restrictions, could be a family foundation)
7) Life insurance.

Here is how the program works (Corresponds to flow chart):

1) Through a series of transactions remove the legal responsibility to pay the gains tax to an organization - 501(c)(3) or other qualified charity - that has no legal obligation to pay the tax in exchange for a guaranteed future payment of money to the 501(c)(3) or qualified charity.
Step 1   -
The client has an appreciated asset (stock, real estate, business, collectibles) that they wish to sell. We establish two entities. These entities are:
 
a) Limited Partnership. We use a Limited Partnership in this transaction because of its unique circumstances where the General Partner controls the Limited Partnership no matter how minor the General Partnership Interest may become,
 
b) Limited Liability Company. All Limited Partnerships must have a Manager. That Manager is called a General Partner. There are risks associated with being a General Partner so we form an LLC that holds very few assets to act as the General Partner. The Managing Member of the LLC, hence the person(s) controlling the General Partnership Interest, can be the client or a person(s) selected by the client.
 
Step 2   -
Now we move the General Partnership Interest in the Limited Partnership to the LLC. We move the Managing Member title for the LLC to the client or the person(s) they select. We trade the appreciated asset to the Limited Partnership for Partnership Interest (not a taxable event).
 
Step 3   -
Now we introduce to the transaction a qualified buyer. Note, for purposes of this transaction we have assumed a cash transaction. That does not have to be the case.
 
Step 4   -
The buyer purchases the appreciated asset from the Limited Partnership. The Limited Partnership, under the direction of its General Partner, makes a deferred charitable contribution to a qualified charity. This contribution is backed by restricted Limited Partnership Interest. Hence, at tax time the charity will get the 1099 or K1 for the gain.
 
Step 5   -
For asset protection, elimination of probate and estate tax planning we form an Intentionally Defective Trust (Ultra Trust). This trust must have an independent trustee. The beneficiaries of this trust are selected by the client. The trust at this point will own:

a) the LLC which holds the General Partnership Interest in the Limited Partnership which holds and controls the cash from the sale,

b) other client assets including their residence,

c) any Limited Partnership Interest that might exceed the amount of the capital gain.
 
Step 6   -
The Intentionally Defective Trust (Ultra Trust) purchases a life insurance policy. That policy, to the amount that is needed to pay the amount of the charitable contribution which was the amount of the capital gain, names the charity as a beneficiary.
 
Step 7   -
The life policy may be structured to provide the ability to borrow from the cash value -tax free -so long as the beneficial amount of the policy never drops below the amount needed to fulfill the promise to the charity. This policy does not have to be written on the life of the client so long as the life covered qualifies under the insurable interest rules.
 
Step 8   -
When the life covered under the life insurance policy dies: a) the amount of the previously determined capital gain is paid to the charity, b) any amount in excess of the amount needed to pay the promise to the charity reverts to the policy owner - the Intentionally Defective Grantor Trust (Ultra Trust), c) the charity returns the Limited Partnership Interest to the trust.

 

Additional Appreciated Assets

The client may use most of the established system to eliminate the gain on other appreciated assets. Please contact United Wealth for details and pricing.

What we have accomplished. We have:

I) Eliminated the capital gains tax to the extent that the charity is a Limited Partner
II) Eliminated probate and estate taxes on the value of the asset sold plus its growth
III) Maintained control of the value of the asset during the life time of the client and perhaps beyond
IV) Maintained the total control of the growth of the value of the appreciated asset after its sale
V) Created a vehicle where the trust, which owns the insurance policy, may generate tax free income to the beneficiaries of the trust -loans against the policy
VI) Gained a charitable gift deduction for the client’s estate for the value of the Limited Partnership Interest
VII) Eliminated probate and estate taxes on the client’s other assets that are titled to the Intentionally Defective Trust (Ultra Trust)

 

Click here to view charts of The Ultimate Transaction - California
Hosted by DatabyteCorp.com