On this episode of House Flip Masters Holly is joined by guest Bruce Jones. Bruce is what he calls himself a tax strategist. Being a former CPA Holly is fascinated by what Bruce is doing and loves to meet people who know how to make taxes less dreadful for people who are successful in their investing ventures. Bruce entered the financial services industry in the 1970’s and has taught the subjects of tax management and financial strategy planning since 1974. He is president and CEO of Tax Wealth a tax analyst, solutions, and research company which identifies comprehensive tax planning solutions for real estate, privately owned businesses, and other appreciated assets. In addition to supporting his own clientele Tax Wealth also supports CPAs, attorneys, financial advisors, and real estate and business brokerage professionals in helping to solve their clients tax problems. Bruce is headquartered in Newport Beach, California.
Bruce has entered his 47th year in financial services which makes him pretty experienced in the field. Tax Wealth focuses on identifying planning opportunities that were overlooked by CPAs and by finding solutions to tax problems. Bruce was in the financial planning and services industries for 41 years before retiring 2 and a half years ago. Knowing the statistics of people who retire and wanting to live longer Bruce created Tax Wealth which has been existence for about 27 years. Tax Wealth is a passion of Bruce’s and he loves to show people what they aren’t aware of and how they can save money.
Holly asks Bruce what are some of the ways in selling real estate that he can solve the tax problem that comes with the sell of properties. Bruce says that when you are selling an appreciated piece of real estate or any other piece of appreciate capital asset there are very few choices to investigate. The first choice for those in real estate is the 1031 Exchange is the sell of an asset and then buying a property of equal or greater value. By following the rules that are under this exchange you will be able to defer your taxes as long as you follow the guidelines. Bruce explains that the 1031 Exchange is a well established law that a lot of people look at to defer their taxes. The second choice for those in real estate is through charitable tax planning - in this option the seller of the property gives the property to a trust or a charity (non-profit and tax free) in which they do not incur any taxes and escaping all capital gain taxes. The donor of this property then gets in return an added charitable tax deduction for the year of the gift and income for term of years or for lifetime but what they are not getting is a lump sum of cash to close escrow. The third choice is a Deferred Sales Trust with this structure the seller of the asset sets up a trust and they sell the property to that trust and then hire a third-party trustee to manage that trust and through this mechanism they defer their taxes. Bruce does not fully support this choice and says that if you are interested in going down this path that you need to listen with great caution and be sure that you fully understand before you make a decision. The next choice that Bruce mentions is the structured sell that allows you to defer the taxes. An important element of this choice is that the money goes off-shore for a portion of time before it comes back for the sale. A choice that Bruce mentions and favors is having to do with installment sales allowing you to pay capital gains taxes at the first and last installment of the note. Bruce calls this option a bandaid at best, but can be worked out better if structured differently which he discusses with us in great length and detail.
Holly asks Bruce to share with listeners how he has been able to help people save money. Bruce shares that he helped to defer $1.5 million in taxes for one man who had a property that was worth millions. Another example Bruce gives is about a family who inherited around $60 million dollars of commercial industrial properties, the three siblings that inherited these properties had two active siblings managing the properties and the third sibling wanted to be bought out because they did not want to manage as well. The only way that it was possible to make this happen was to sell one or more of the properties so that they could buyout the third sibling/partner. In the selling of the property Bruce was able to have the commercial industry taxes eliminated and the other taxes deferred for 30 years.
If you are interested in learning more from Bruce you can get in touch with him at his website www.TaxWealth.com and you can also call his office toll free at (800) 300-4723 - Bruce wants listeners to know that he wants to help people and any call to him does not cost the caller anything to talk to him. He believes that you have to earn the right to earn the client.