Generation-Skipping with Business Sale Proceeds

Would you like to sell your business, and pass down the cash proceeds tax free to your Kids and GrandKids?

If I could show you a way, LEGALLY, to sell your business (or other Asset, e.g., Real Estate / Art) without having to pay any of the six potential taxes <Federal Estate Tax, State Inheritance or State Estate, Federal and State Income Taxes, Federal and State Capital Gains, Federal and State Gift Taxes and Generation Skipping Taxes>, would you be interested?

Here is a brief outline of the advanced strategy that My Key Adviser has used to relieve someone, or an entity, legally, from having to pay any of the six forms of taxes that might be payable upon the sale or purchase of a business, or any other form of property or asset. . .

  1. Arms’ Length Fair Market Value Transaction: The Buyer, who can fund the sale, and the Seller – who may not need the Sale Proceeds and would prefer to avoid Capital Gains and other taxes – agree on a Fair Market Value (FMV) Transaction, based on the usual and customary price, settlement date, due diligence and other considerations. . .
  2. “Special Trust” Established: A “Special Trust” is established that acts as the vessel to receive the proceeds of the sale tax-free on the date of death. <Under present Federal tax law, the nature of the “Special Trust” eliminates the following taxes, (a) Federal Estate Taxes, (b) State Inheritance and Estate Taxes, (c) Federal and State Income Taxes, (d) Federal and State Capital Gains Taxes, (e) Federal and State Gift Taxes, Generation Skipping Taxes.>. . .
  3. Trust Funded: The Trust is funded with a form of Insurance which permits the funds to be paid to the Trust. <The insurance is immune to the same taxes as the Seller of the business, or other asset or property.>. . .
  4. Proceeds Deferral to Generation-Skipping Heirs: The Seller defers the receipt of the sale price until his/her death and/or the spouse’s death. . .
  5. Seller-Paid PIT on 1-4% Asset Value: Upon establishing the Special Trust and implementing the Insurance, the Seller pays a U.S. Personal Income Tax (PIT) on the item sold (approximately 1%-4% of the item sold, depending upon age of the Seller, e.g., $100K-$250K-$400K to tax-shelter a $10mil Transaction), according to a certain IRS Tax Table. <This represents the necessary “consideration” the Seller must receive, for the transaction to qualify for tax relief from all the other taxes.>. . .
  6. Buyer-Financed Premium Loan: The Buyer pays the interest on a series of loans, or a single loan, that funds the insurance premiums in the trust, that pays the final funds to the beneficiaries of the trust. <The interest paid may be structured to be tax deductible, reducing the Buyer’s cost.> <The Buyer guarantees the transaction with a Letter of Credit received from his/her banking relationship in the event he/she defaults on the loan.>. . .
  7. FMV Proceeds Delivered upon Demise of Seller / Spouse: At the death of the Seller, and perhaps the Seller’s spouse, depending upon terms / ownership, the full Fair Market Value Proceeds of the Sale are delivered to the designated heirs free of Federal & State taxes.

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