Background includes 15 years as a commercial contractor constructing
buildings and agriculture business facilities in the Midwest. 25 years as a business broker and financial advisor
involved in assisting business and property owners to sell, merge or
acquire (mergers and acquisitions) and fund (investment banking). Consistently had challenges to transfer ownership and maintain
wealth. The end goal challenge generally included an efficient tax
and estate plan. Not a CPA, but worked with CPAs and tax attorneys
to plan. A CPA and attorney are much like a doctor. Unless one can
tell them where it hurts they generally volunteer little. What CPAs,
tax advisors and attorneys tell us is within the scope of their practice that
generally does not work extensively with property transfer tax code.
Experience here is with transferring property and keeping our money,
i.e. saving tax money within the tax code. A CPA/tax advisor
generally knows their client’s tax details. We can be an assistant to
tax advisors, real estate professionals and a client to minimize taxes when it is a goal.
We do not market
annuities, insurance or list real estate or businesses. We may, with client
permission, refer to those who
Step up Basis at Death - The
Ultimate Tax Exclusion Real estate and most
property of value advantage the step up basis
transferring to beneficiaries at current value at death
of owner. In many situations beneficiaries can sell and
owe no tax. Note: Annuities, qualified plans (as IRA,
401k, SEP) and non-qualified (annuities) plans are not
****Internal Revenue Code (IRC) §199A
also known as the “Pass Thru Deduction”.
There is Now a Deduction for up to 20 Percent of the
Qualified Business Income of Pass Through Entities.
The Act establishes a new deduction for owners of pass
through entities that may enable those owners to deduct up to 20 percent
of their qualified business income. This deduction is effective for
taxable years beginning after December 31, 2017, but expires in taxable
years beginning after December 31, 2025.
CPA recommended. See more at
Residence Gain Tax Exclusion
allows two year plus owner
occupancy of residence a $250,000 gain exclusion. If
married spouse can add another $250,000 exclusion
for maximum $500,000 gain exclusion. Over
the $250k/$500k gain exclusion may consider the Energy
Rehab Acquisition or Exchange as a replacement property
to tax defer balance of gain.
Tax Deferred Exchange Updated as of
2018, relinquished real property (real estate) only. IRC
§1245 (personal property) now not exchanged. Exchange
Accommodator/Intermediary is necessary. Guided by time
limit, replacement property and other significant rules. CPA recommended.
§1033 Tax Deferred Exchange
is for Government
acquisition of real estate by eminent domain. Exchange
Accommodator/Intermediary is not necessary. Guided by
two year time limit and other significant rules. CPA is recommended.
§721 Tax Deferred Exchange also known as the UPREIT. For
an Real Estate Investment Trust acquisition, one
1031 exchanges into a qualified replacement property
owned by a REIT then into the REIT in an unspecified time. The transfer
into the REIT converts to REIT shares that may be sold
in partial with deferred tax due.
§1045 Qualified Business Stock Exchange
business 1031 but better)
is key. Exchange stock
or into qualified business stock. Business must
qualify, is not publicly traded, is not a finance, real
estate, bank, hotel, restaurant, medical with doctors,
attorney or insurance company. Can be an affiliated
service business. Manufacturers, distributors and
service companies popular candidates owned over five
years. Other qualifications as date business or part of
business acquired. Specialized Attorney and CPA
§179 has been amended to include types of building
was increased to $1,000,000 for tax years beginning
after 2017, with the phase-out beginning at $2,500,000
of qualifying assets placed in service.
*IRC §1245 & §179 new or rehab special
building acquisition Generally Agriculture,
horticulture and other
single purpose buildings. (advantageous tax code opportunity for any
property including ordinary income) IRC §179 (§168)
new/used equipment Potential 100% immediate
deduction of any proceeds. CPA recommended.
§469 Managed Passive
Investment Tax Exclusion - Energy Rehab Acquisition
(the most advantageous tax
code including ordinary and all incomes). 100% deduction
fro deferral. Potential 90% immediate deduction of any
proceeds. Potential IRC §1031
sale tax deferred to qualified replacement property. CPA recommended.
Installment Contract Sale (for some property one can delay paying capital gains,
not always depreciation recapture tax) over a period
of time (deferral). Any amount acceptable as efficient to parties. Attorney and CPA
Pay Any and All Taxes
Forget tax exclusions, deferrals and deductions
assisting the less fortunate, family, friends, health or
education. Our Federal, state, and local
governments, efficient at spending your money, thank
you, We all thank you.
TDCO contract for most
property; reinvest in all assets or keep proceeds. Depreciation recapture is a
challenge. $1M+ minimum or acceptable proceeds to
owner. Tax deferred, cash out. Energy rehab for potential recapture tax
deferral. Specialized Tax
Attorney & CPA recommended.
§1202 QSBS Qualified Business Stock Sale
Creating Small Business
Jobs Act of 2010 (improving 1993 Act) increased the gain exclusion to 100% of
the total gain for all QSBS issued after September 27,
2010. & $10M or 10 times the aggregate adjusted QSBS
limit. Specialized Attorney & CPA
Trust SPT Monetized IRC
Contract Sale requires
third party trustee-for most property. Must reinvest in
business investment (the goal is to place proceeds into
insurance securities products continuing inflexibility). Depreciation recapture
is a challenge. $1M+ or acceptable to
owner. Specialized Tax Attorney & CPA recommended.
KW does not
Similar to above. Proceeds to a
managed trust paid out over time. Included in estate.
avoid probate for all property-assets. Prevent
beneficiary conflict or heirs challenged at handling
money. Specialized Tax Attorney & CPA recommended.
KW does not
Health Savings Account (HSA)
Better than an IRA? Medical, dental, vision care are
deductible before taxation.
contribution is up $50 to $3,550 for individuals and
$100 to $7,100 for families. Maximum catch-up
contributions for people over age 55 remain at $1,000. Health
account options: HSA (Health
Savings Account); FSA (Flexible Spending
Account/Arrangement); HRA (Health Reimbursement
tied to high-deductible health plans (HDHP).
defined as those plans that have a minimum deductible of
$1,350 for individuals or $2,700 for a family.
Individual Retirement Account (IRA-ROTH IRA,
SEP, Individual (solo) 401k-ROTH 401k, solo defined
benefit & more)
Move Qualified Retirement
Plan into real and personal property.
how to enhance most highly taxed and popular supposedly tax deferred
and conservative savings products with tax reduction.
rehab deferral and §1031 tax deferral has death
step-up valuation and estate asset advantages). Stretch
annuities and variable annuities for tax deferral
ranging from low risk to extremely high risk tax
deferred plans. Extreme highly taxed plans at any
transfer including death. We do not sell insurance
or annuities. CPA recommended.
+ More IRS Code for
Immediate Tax Deduction.
income LegacyChange Plan. Immediate tax
deduction relief with insured income stream.
Change illiquid assets as land to income.
Partial gifts to your favorite causes.
Avoid probate for all
property-assets. Prevent beneficiary
conflict or heirs challenged at handling money.
Somewhat as an economical,
simplified Reverse Charitable Trust
or Deferred Sales Trust
but with guaranteed
income. Generally for property-asset holders $100k-$20M+/-.
Tax Deed*** with
transfer ownership to the buyer of a property that has been sold due to
delinquent taxes. In a tax
the property itself is sold. Unwanted property can be
valuated and gifted for tax deduction.
See more at
Opportunity Zones OZ
New program allow one to
defer, reduce and eliminate capital gains taxes. Invests
in areas where locations are deemed challenged for
business growth. May be in a fund. 10 years to maximize
deferral, CPA recommended.
with Pour Over Will 2/3 of us have no will or plan.
Financial Power of Attorney, Health or Living Will
verses will or no will. You, probate and
government estate control or out of control time and
expense. Testamentary trust inside of will. LLC, C Corp,
S Corp, Life estate, land trust advantages, popular
titling errors. Attorney & CPA
Irrevocable Trust Bypass estate tax limits tax
free to fund estate tax owed
or state limits or other goal. Experienced Attorney and
Eternal or Perpetual Trust, Self-insurance,
Real Estate Easement Plans with Advanced Tax-Estate Planning.
Irrevocable. For Affluent, Married $23.16M,
Individual $11.58M or as aceptable to woner. Specialized Estate/Tax Attorney
Life Insurance Settlement
Minimum policy benefit
$500,000 (preferably $1M+)
No maximum policy
benefit 60 Years of age + with
impairments 70 Years of age + without impairments
All types of policies Less than
12 Years life expectancy
The amount paid into
the policy (the tax basis)
Proceeds greater than the tax basis,
but less than the cash surrender value, are taxed at
ordinary income rates. Any remaining amount is subject
to capital gains tax.
Return to Top of Page
2020 rules push retirees into
higher tax brackets, resulting in many having 85% of their
Social Security benefits taxed as well as many being
penalized by tax for higher Medicare premiums.
*Note: A Section 1245 "storage facility" differs from a
non-Section 1245 building in that the latter may contain a work area in
addition to its storage function and may reasonably be adapted to other
uses. Qualifying Section 1245 structures cannot contain work areas
except as necessary to care for the livestock, plants or their produce
or to maintain the structure and equipment. For example, having a cash
register inside a greenhouse for handling sales to the public would
disqualify the structure as a Section 1245 single purpose structure.
**Note: IRC Section 121
$250k/$500k gain exclusion may choose to use the Energy
rehab exchange or acquisition for the balance of the gain.
By the end of 2019, over $15 trillion worth
of inheritance will pass through the probate courts in America. The #1
asset sold first is the real estate. We inform and can assist for
efficient transfer of asset ownership.
three trillion $
in annuities in USA. 95% are left to heirs. Gain is taxed ordinary
income (now 37% top bracket) plus any state/city tax. Spouse is not
excluded so is taxed at one's death or transfer. Consider energy rehab acquisition.
and business CPA/Tax Adviser is always
recommended for your primary tax consultant.
experienced tax and legal advisor who can know you and your
specific situation, local to your property area and
jurisdiction. If one does not have a personal business legal
adviser we can recommend attorneys in all 50 States.
Other common business considerations
could include comprehensive liability insurance umbrella and
other life and disability protection.
For one who qualifies with real property real estate we have
replacement properties for 1031 tax deferral. Some are rehab
commercial property. Some are new 15-20-year absolute leased
high-end income properties leased to tenants with positive inflation
and recession resistance. This is accomplished by location and type
(rehabilitated, improved or reworked properties generally have the
option or plan to divest within two-three years rolling into another
wealth building property. They may or may not have an option for
rehab properties are with known management and rework operators. As
with any venture recommend new associates have references for
experience and integrity. For energy rehab my choice is a CPA firm
that has a business end with consulting and actual rehab projects
they manage. Former Deloitte CPAs, they have decades experience in
oil & gas operations and taxation. This can be the resource for
clients and CPAs to advantage the most prolific tax advantages in
the US tax code. Their experience includes years of alternatives to
be tax efficient.
rehab property minimum entry income properties are $100k and more. The property
is producing oil & gas. The goal is to buy low, improve the production
and income rolling into another or 1031 out to different qualified
property. One receives recorded ownership document allowing
divesture when desired with a two-three divest year goal. There can
be sheltered income options. Each associate has their personal tax
plan and goals. One can build with one’s own tax protected annuity
with periodical tax-deductible contributions. Up to $5M or more of
acquiring an energy rehab property one potentially deducts 100% of
any income, gain, depreciation recapture, investment or ordinary,
personal, real estate or business asset proceeds with a 15 year loss
We include a
non-disclosure confidentiality document for doing business. We are
searching for long term integrity associates with common goals.
Look forward to knowing you and your goals.
Confidentiality-Non Disclosure Agreement
1LessTax.com – Ken Wheeler Jr. Sample Tax Scenario
Funding of property or
asset (BASIS): $200,000.00
Divest or sell
energy rehab $100,000.00 is the prime amount to deduct so is the
first amount to consider to transfer to the energy rehab property.
not have to transfer the complete amount as in a 1031 qualified
exchange or other defer/deduct methods.
energy rehab property is real property so when one divests one can
choose any other business property to defer tax with the 1031 rule
or refund into another energy rehab property with or without basis,
right people one can have as an energy property annuity to receive
and deduct most income and proceeds from any transaction.
Return to Top of Page