Family tax planning with shared equity financing setups
Article Abstract:
The cost of acquisition and ownership of a residence is beyond the financial capabilities of many young people. Fortunately, the Internal Revenue Code offers provisions enabling parents, relatives and friends to help these young individuals purchase a home. Parents can assist their children get their own homes without sacrificing the tax benefits related to real estate investments by jointly purchasing homes under shared equity financing setups. Under these agreements, the young people live in the house and pay the co-owners a fair rental value for their part of the ownership. Each owner is supposed to pay a fraction of the mortgage interest, principal, property taxes and other expenses based on the ownership interests. The investor-owner is therefore like a landlord while the occupant-owner is the tenant and part-owner. In the end, the occupant gets full ownership when financially able to carry the entirety of the burden.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1996
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Controlling taxable estates of executives means planning now
Article Abstract:
Estate planning is primarily concerned with reducing the value of a taxable estate while creating a plan to maximize the taxpayer's financial security. A gross estate contains taxable transferable assets that the taxpayer owns at the time of their death. It is essential to reduce the taxpayer's control over the estate in order to reduce the size of the estate tax. thus Some methods for reducing the estate of high net-worth clients are lifetime gifts and life insurance trusts, which distribute the benefits of the estate before the taxpayer's demise. Unless it is absolutely necessary for the taxpayer to retain a controlling interest, residual interests or powers over property transferred to family members should not be retained as it can have negative tax consequences.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1990
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Recent developments affect several tax planning aspects of life insurance
Article Abstract:
The nontaxable aspects of life insurance investments and the distribution of proceeds therefrom upon the death of the policyholder make life insurance an attractive investment. Tax treatments are examined that apply to exchanges of life insurance policies for better proceeds, borrowings against life insurance policies, and receipts of policy benefits. Under recent legislation, most types of interest on loans against insurance policies will no longer be deductible from the insured's taxes, and exchanges of life insurance policies will not be taxable as long as no "boot" is deemed to have occurred.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1986
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