By Brad MacLiver
Authorship and profile at Google
Almost everything you own and use for personal, or business, purposes is a capital asset. When WA pharmacy owners sell a capital asset, the difference between the amounts you sell it for and the amount you paid for it (the basis), is a capital gain, or a capital loss.
Capital gains may also refer to "investment income" that arises in relation to real assets, such as property, financial assets, and intangible assets such as goodwill. In theU.S.
When selling aWashington
During this period of history where it is more difficult to finance a business, pharmacy sellers may have already been required to lower their asking price so pharmacy buyers can qualify for the financing required. In addition to having lower offers, they are also required to pay a higher percentage in taxes.
This is a dilemma for the pharmacy seller in WA who wants as much money out of the deal as possible. For most who own a pharmacy, their business is the largest asset they will ever own and their retirement and estate plan rely on selling the business at a certain dollar amount. With the knowledge that they will need to cut out a larger chunk of the proceeds to give to the government, this will cause some pharmacy owners to reconsider their retirement plans. However, there is good news in that there are financial tools and strategies that allow the pharmacy owner inWashington
One strategy is to utilize Family Foundations. These are tax exempt/nonprofit organizations that provide tax advantages and control over philanthropic activities. Family foundations are usually private foundations funded by a small number of sources. They do not hold widespread fund-raising events, but they may receive gifts from friends and other limited sources. The founder's family members serve as the trustees, directors, and officers. Because they are private foundations, they can make grants or donations to other organizations. Having a Family Foundation provides a number of benefits including, income tax deductions, exemptions from estate and gift taxes, along with the reduction or elimination of other taxes.
Yet another strategy that is currently available to assist the capital gains tax burden is the Charitable Remainder Trust (CRT). CRT’s are legally described as Split Interest Trusts. The term is used because of the blend of philanthropic motivations and personal financial aspects. CRT’s can decrease tax liabilities, increase a business owner financial wealth, and at the same time provide a vehicle for charitable giving.
CRT’s are formed when a person donates assets to this special type of Trust. Assets can be cash, stocks, real estate, etc. The CRT is set up for a set period of time, or until the donor’s (pharmacy owners) death. An individual (WA pharmacy owner or family member) can receive income from the Trust’s assets. Upon the donor’s death the assets go to a designated charity. Part of the income from the Trust can be used to purchase life insurance on the donor. The proceeds of the life insurance go to a designated heir(s) who receive the money without incurring any estate tax liability.
Some tax strategies including the use of CRTs are not widely known. It would be advisable for pharmacy business owners inWashington
Over the years there have been unscrupulous individuals who have tried using CRTs and similar financial tools in illegal scams. With the increase in capital gains taxes there are expectations more scams will be floating around out there. Be knowledgeable about the possibilities, but be confident you are working with experts in your industry.
You should consult a firm with extensive experience in pharmacy and drug store acquisitions. Firms that have the knowledge and expertise to structure the transaction appropriately, for tax considerations, can save aWashington
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Authorship and profile at Google
Almost everything you own and use for personal, or business, purposes is a capital asset. When WA pharmacy owners sell a capital asset, the difference between the amounts you sell it for and the amount you paid for it (the basis), is a capital gain, or a capital loss.
Capital gains may also refer to "investment income" that arises in relation to real assets, such as property, financial assets, and intangible assets such as goodwill. In the
When selling a
During this period of history where it is more difficult to finance a business, pharmacy sellers may have already been required to lower their asking price so pharmacy buyers can qualify for the financing required. In addition to having lower offers, they are also required to pay a higher percentage in taxes.
This is a dilemma for the pharmacy seller in WA who wants as much money out of the deal as possible. For most who own a pharmacy, their business is the largest asset they will ever own and their retirement and estate plan rely on selling the business at a certain dollar amount. With the knowledge that they will need to cut out a larger chunk of the proceeds to give to the government, this will cause some pharmacy owners to reconsider their retirement plans. However, there is good news in that there are financial tools and strategies that allow the pharmacy owner in
One strategy is to utilize Family Foundations. These are tax exempt/nonprofit organizations that provide tax advantages and control over philanthropic activities. Family foundations are usually private foundations funded by a small number of sources. They do not hold widespread fund-raising events, but they may receive gifts from friends and other limited sources. The founder's family members serve as the trustees, directors, and officers. Because they are private foundations, they can make grants or donations to other organizations. Having a Family Foundation provides a number of benefits including, income tax deductions, exemptions from estate and gift taxes, along with the reduction or elimination of other taxes.
Yet another strategy that is currently available to assist the capital gains tax burden is the Charitable Remainder Trust (CRT). CRT’s are legally described as Split Interest Trusts. The term is used because of the blend of philanthropic motivations and personal financial aspects. CRT’s can decrease tax liabilities, increase a business owner financial wealth, and at the same time provide a vehicle for charitable giving.
CRT’s are formed when a person donates assets to this special type of Trust. Assets can be cash, stocks, real estate, etc. The CRT is set up for a set period of time, or until the donor’s (pharmacy owners) death. An individual (WA pharmacy owner or family member) can receive income from the Trust’s assets. Upon the donor’s death the assets go to a designated charity. Part of the income from the Trust can be used to purchase life insurance on the donor. The proceeds of the life insurance go to a designated heir(s) who receive the money without incurring any estate tax liability.
Some tax strategies including the use of CRTs are not widely known. It would be advisable for pharmacy business owners in
Over the years there have been unscrupulous individuals who have tried using CRTs and similar financial tools in illegal scams. With the increase in capital gains taxes there are expectations more scams will be floating around out there. Be knowledgeable about the possibilities, but be confident you are working with experts in your industry.
You should consult a firm with extensive experience in pharmacy and drug store acquisitions. Firms that have the knowledge and expertise to structure the transaction appropriately, for tax considerations, can save a
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