1LessTax.com
PayNoTax.biz
LegacyChange.com
Ken Wheeler Jr.'s
experience
includes 15 years as a commercial contractor constructing
buildings and agriculture business facilities in the
Midwest. 25 years was as a business broker and financial
advisor including 37 years as a real estate broker 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 work with CPAs and tax attorneys for
asset plan. A CPA and attorney are much like a doctor.
Unless one can tell them where it hurts many can 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 best. 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
request or
permission, refer to those who
do. |
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Go to Site Contents
Go to
Webinar/Seminar
detail
Documents for I-Meets
2020 Tax Brackets (limited)
25 Tax
Efficiency Methods
Non-Disclosure
Agreement
5 Tax Efficiency Methods
6 Tax Efficiency
Methods
Executor Duties
LegacyChange Plan Summary
Stop Your Inheritance From Being Stolen
LegacyChange Worksheet
QSBS
Worksheet
2020 Tax Brackets for Single/Married Filing Jointly/Head of
Household
Tax Rate |
Taxable
Income (Single) |
Taxable
Income (Married Filing Jointly) |
Taxable Income (Head
of Household) |
10% |
Up to $9,875 |
Up to $19,750 |
Up to $14,100 |
12% |
$9,876 to $40,125 |
$19,751 to $80,250 |
$14,101 to $53,700 |
22% |
$40,126 to $85,525 |
$80,251 to $171,050 |
$53,701 to $85,500 |
24% |
$85,526 to $163,300 |
$171,051 to $326,600 |
$85,501 to $163,300 |
32% |
$163,301 to $207,350 |
$326,601 to $414,700 |
$163,301 to $207,350 |
35% |
$207,351 to
$518,400 |
$414,701 to
$622,050 |
$207,351 to
$518,400 |
37% |
Over $518,400 |
Over $622,050 |
Over $518,400 |
For current & past USA Taxable
Income Brackets go
here.
IRS
"Stealth Tax"
is result of less common income moved with all income to a higher
tax
bracket.
Reduce the "Stealth Tax"
with one's own "Tax Bracket Monopoly"

Go to
Summary outline
of six tax methods to increase efficient affluent client
activity.
Go to
2020 Federal Estate Tax
Rates Go to
Senior Delights
|
25 Tax
Reduction Alternatives Summary for Tax Efficiency
Copyright © 2018 -
2020 K. B. Wheeler Jr. All rights reserved.
-
Step up Basis at Death - The
Ultimate Death 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
included.
CPA recommended.
-
****Internal
Revenue Code (IRC) §199A
also known as the “Pass Thru Deduction”
for QSI (Qualified Business Income).
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.
Avoid the
Stealth Tax
See more at
1LessTax
-
**IRC §121
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 an IRC
§1031 replacement property
to tax defer balance of gain.
CPA recommended.
-
IRC
§1031
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 & other significant rules. CPA recommended.
Avoid the
Stealth Tax
www.1031FEC.com
-
IRC
§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.
www.1031FEC.com
-
IRC
§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.
CPA recommended.
-
IRC §1045
Qualified Business Stock Exchange
(aka
business
§1031 but better)
Qualified Business
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, retail and service companies are popular
candidates when owned over six months from date business or part of
business acquired. Specialized Attorney and CPA
recommended.
Bloomberg
Article American
Bar Association 1202 Article
-
IRC §179
has been amended to include types of building
improvements.
Ceiling
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.
Avoid the Stealth Tax.
CPA recommended.
See more
at
1LessTax
-
*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.
www.PayNoTax.biz
-
IRC
§469
Managed Passive
Investment Tax Exclusion - Energy Rehab Acquisition
(an advantageous tax code for
including ordinary and all incomes). 100% deduction for deferral. Potential 90% immediate deduction of any
proceeds. Potential IRC §1031
sale tax deferred to qualified replacement property. CPA recommended.
Avoid the Stealth Tax.
www.PayNoTax.biz
-
IRC
§453
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
recommended.
-
IRC
§453
TDCO contract
for most
property and businessses; reinvest in all assets or keep proceeds. Depreciation recapture is a
challenge. $1M+ minimum gain or acceptable proceeds to
owner. Tax Deferred,
Cash Out. Energy rehab for potential recapture tax
deferral. Specialized Tax
Attorney & CPA recommended.
-
IRC
§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. Each investor $10M or 10 times the aggregate adjusted QSBS
limit. Two million corporations. Some qualify. Combine
with QOZ? Trusts? Estate Plan? Specialized Attorney & CPA
recommended. American
Bar Association 1202 Article
Bloomberg
Article
-
Sales Proceeds
Trust SPT Monetized IRC
§453
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
recommend.
-
Deferred Sales
Trust (Legacy Plan Contract)
DST 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
recommend
unless insured as
Legacy Plan Contract. See
www.LegacyChange.com
-
Health Savings Account (HSA)
Better than an IRA? Medical, dental, vision care are
deductible before taxation.
Maximum
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
Arrangement).
HSAs are
tied to high-deductible health plans (HDHP). HDHPs are
defined as those plans that have a minimum deductible of
$1,350 for individuals or $2,700 for a family.
Avoid the
Stealth Tax.
www.PayNoTax.biz
&
www.LegacyChange.com
-
Individual Retirement Account (IRA-ROTH IRA,
SEP, Individual (Solo) 401k-ROTH 401k,
Solo or full Defined
Benefit & more) Move Qualified Retirement
Plan into real and personal property.
Learn
how to enhance most highly taxed and popular supposedly tax deferred
and conservative savings products with tax reduction.
(Energy
rehab deferral and §1031 tax deferral has death
step-up valuation and estate asset advantages). Stretch
IRA gone.
Misses the death tax
exclusion.
CPA recommended.
Avoid Stealth Tax
www.PayNoTax.biz
&
www.LegacyChange.com
-
Non-Qualified
Retirement Accounts
Includes
various
annuities and variable annuities for tax deferral
ranging from low risk to extremely high risk tax
deferred plans. Highly taxed at any
transfer including death.
Misses the death tax
exclusion. Avoid Stealth Tax
We do not market insurance
or annuities. CPA recommended.
www.PayNoTax.biz
&
www.LegacyChange.com
-
LegacyChange
IRC
§453
+ More IRS Code for
Immediate Tax Deduction.
Income shifting.
Insured guaranteed
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 Charitable Trust
or Deferred Sales Trust
but with guaranteed
income. Generally for property-asset holders $100k-$20M+/-.
CPA recommended.
Avoid the Stealth Tax.
www.LegacyChange.com
-
Tax Deed*** with
IRS
Gifting Code
Tax
deed at
auction
can legally
transfer ownership to the buyer of a property that has been sold due to
delinquent taxes. In a tax
deed sale,
the property itself is sold. Unwanted property can be
valuated and gifted for tax deduction.
CPA recommended.
Avoid the
Stealth Tax.
See more at
1LessTax
-
Opportunity Zones
QOZ
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. Combine with 1202? Estate plans? Trusts? CPA recommended.
-
Revocable Trust
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. With will. you, probate and
government jave estate control, or out of control time and
expense. Testamentary trust inside of will? Stirpes
verses per capita? POA, Living Will? LLC, C Corp,
S Corp, Life estate, land trust advantages, popular
titling errors. Attorney & CPA
recommended. PPL-LS?
Combine with?....
-
Irrevocable
Pure Grantor Trust
as a
revocable living trust, you are the creator (grantor)
and the person in control of the property (trustee). One
is a lifetime beneficiary to income only or living in a
trust property. Other people one names, are lifetime
beneficiaries of the assets plus are usually death
beneficiaries.
Anything one transfers
into the trust is immediately protected from creditors
and predators. After
five years,
trust assets
are invisible to Medicaid.
Assets at your death are included in your
estate. Your beneficiaries receive stepped-up cost
basis.
Estate attorney recommended.
-
Life Insurance
Irrevocable Trust Bypass estate tax limits tax
free to fund estate tax owed
over Federal
or state limits or other goal. Experienced Attorney and
CPA recommended.
www.LegacyChange.com
-
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 acceptable to owner. Specialized Estate/Tax Attorney
& CPA
recommended.
www.EternalLegacyTrust.com
Avoid the
Stealth Tax!
Have proper Tiltling!
Be aware of Death Tax Exclusion
Copyright ©
2018 - 2020 K. B. Wheeler Jr. All rights reserved.
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Contents
*Note: An IRC
§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
§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
§1245 single purpose structure.
**Note: IRC
§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.
Currently
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.
Your personal
and business CPA/Tax Adviser is always
recommended for your primary tax consultant.
Recommend an
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 inexpensive comprehensive liability insurance umbrella and
other life and disability protection.
Senior Delights
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.
Deduction of Medicare Premiums for the Self-Employed;
Folks who continue to run their own
businesses after qualifying for Medicare can deduct the
premiums they pay for Medicare Part B and Part D, plus the
cost of supplemental Medicare (medigap) policies or the cost
of a Medicare Advantage plan.
This deduction is available whether or not you itemize and
is not subject to the 10% of AGI test that applies to
itemized medical expenses. One caveat: You can't claim this
deduction for premiums paid for any month that you were
eligible to be covered under an employer-subsidized health
plan offered by either your employer (if you have a job as
well as your business) or your spouse's employer (if he or
she has a job that offers family medical coverage).
A College Credit for Those Long Out of College;
College credits aren't just for
youngsters, nor are they limited to just the first four
years of college. The Lifetime Learning credit can be
claimed for any number of years and can be used to offset
the cost of higher education for yourself or your spouse . .
. not just for your children.
The credit is worth up to $2,000 a year, based on
20% of up to $10,000 you spend for post-high-school courses
that lead to new or improved job skills. Classes you take
even in retirement at a vocational school or community
college can count. If you brushed up on skills in 2019, this
credit can help pay the bills. The right to claim this
tax-saver phases out as income rises from $58,000 to $68,000
on an individual return and from $116,000 to $136,000 for
couples filing jointly.
Social Security Tax; if you're self-employed and
have to pay the full 15.3% tax yourself (instead of
splitting it 50-50 with an employer), you do get to write
off half of what you pay. Plus, you don't have to itemize to
take advantage of this deduction. |
General Business
Operating Procedure
When someone asks for personal information of any kind
please keep in mind you can ask the same of the person or
entity who is asking you, and should do so. Why would one do
business with an unknown?
Have you had people ask for your financial statement?
Ask for their current financial statement.
Especially when anyone is asking for your funds or any
business transaction that could affect your funds, this
should be a common response by you along plus ask for
references from past business clients and associates. Then
one checks the references that have a known legitimate
presence.
Otherwise, it is as purchasing anything without proof of
title or proven position from an unknown person or entity.
After business people are proven legitimate and doing
business in a proper and legal manner, then there is the
normal risk of doing business.
If anyone does not wish to prove their qualifying business
existence that is the first big flag to move on.
Recommend one purchase a subscription to a background
checking service. There are many online. |
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
of business.
Rehab
(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
deferred income.
The energy
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.
The energy
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
carry forward.
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
Avoid
the Stealth Tax.
Funding of property or
asset (BASIS): $200,000.00
Divest or sell
for: $300,000.00
Gain or
Profit $100,000.00
TAXABLE
$100,000.00
For an
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.
One does
not have to transfer the complete amount as in a 1031 qualified
exchange or other defer/deduct methods.
The
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,
deducting all.
With the
right people one can have as an energy property annuity to receive
and deduct most income and proceeds from any transaction.
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Go to Summary outline
of six tax methods to increase efficient affluent client
activity
Types of income
Active Income
Income for which services have been performed. This includes
wages, tips, salaries, commissions, and income from
businesses in which there is material participation.
Passive Income
Most types of passive income are derived from real
estate/property, while other types of passive income are
derived from royalties from patents or license agreements.
An income stream falling into this category is one where
money is received usually on a regular basis, where no
additional effort has taken place. Most passive income
streams require great effort to start with.
Some examples: Interest Income paid from bank deposits,
rental income from real estate/property., royalties from
writing a book, dividends from shares holding.
Another example of passive income come from network
marketing.’
Passive income flows to you or your family whether you are
sick, or vacationing, or dead. Passive income streams allow
you to make money without having to be there.
Note:
§469 only exception below.
Portfolio Income
Portfolio income is income from investments, including
dividends, interest, royalties, and capital gains. I would
say that portfolio income is a subset of passive income. |
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