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Four years ago at age 56, Jeff and Christine invested in a $1 million property. Now they are tired of the hassle of property ownership and want to cash out and benefit from a $2.1 million sales price that the booming real estate market in California has created. EXISTING ADVISER ADVICE Jeff and Christine were told to bite the bullet and pay over $250,000 in federal and state taxes. After a friend told them about Reyes Consulting and the Asset Transfer Trust that saved him hundreds of thousand of dollars, Jeff and Christine decided to gather more information about other options before they just paid the taxes. REYES CONSULTING SOLUTION Reyes Consulting created an Asset Transfer Trust (A.T.Trust) into which Jeff and Christine placed the property before escrow closing, establishing a tax-deferred transaction, therefore saving the $250,000 in capital gains tax. The A.T. Trust ultimately sold the property. In turn, the A.T.Trust pays the couple a lifetime annual income of $113,500* which can be invested in a diversified portfolio as the client and Reyes Consulting see fit. The IRS will receive all of the tax due, but it is paid over the sellers’ lifetime – an interest-free loan from the IRS. The remaining assets will pass on estate tax free. *assumes a 7% growth over 30-year period.
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