By Brad MacLiver
Authorship and profile at Google
Almost everything you own and use for personal, or business, purposes is a capital asset. When Colorado (CO) 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 a pharmacy or a drug store, there are specific tax strategies that can be used to help offset the tax liabilities. Unless a professional is handling a large number ofColorado
During this period of history where it is more difficult to finance a business, pharmacy sellers may already be required to lower their asking price so pharmacy buyers inColorado
This is a problem for the pharmacy seller who wants as much money as possible out of the deal. For most CO pharmacy owners, their business is the most valuable asset they will ever own and selling that business at a specific dollar amount has been part of their retirement and estate planning. Knowing they are required to cut out a larger chunk of their proceeds to pay in taxes will cause some pharmacy owners to reconsider their retirement plans. The good news is that there are financial tools and strategies available that allow the pharmacy owner inColorado
Family Foundations are a type of tax exempt/nonprofit organization that provides tax advantages and control over philanthropic activities. Typically, family foundations are private foundations that get their funding from a small number of sources and they do not conduct widespread fund-raising activities. They may receive gifts from limited sources and friends. Family members serve the foundation as officers, trustees, and directors. They can make grants or donations to other organizations as private foundations. Having a Family Foundation provides a great deal of benefits including income tax deductions, exemptions from gift and estate taxes, and elimination or reduction of other taxes.
One strategy, but not the only one, 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 (CO 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 to be aware of the different tools that are available in structuring a business transaction. They should also be aware that only a professional with vast experience in CRTs should be used to setup a Charitable Remainder Trust. Not following the strict IRS guidelines could be cause for increased taxes, penalties, and in some cases criminal charges.
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.
When you are considering selling your independently owned pharmacy or a small drug store chain, you should consult a firm with extensive experience inColorado
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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 Colorado (CO) 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 pharmacy or a drug store, there are specific tax strategies that can be used to help offset the tax liabilities. Unless a professional is handling a large number of
During this period of history where it is more difficult to finance a business, pharmacy sellers may already be required to lower their asking price so pharmacy buyers in
This is a problem for the pharmacy seller who wants as much money as possible out of the deal. For most CO pharmacy owners, their business is the most valuable asset they will ever own and selling that business at a specific dollar amount has been part of their retirement and estate planning. Knowing they are required to cut out a larger chunk of their proceeds to pay in taxes will cause some pharmacy owners to reconsider their retirement plans. The good news is that there are financial tools and strategies available that allow the pharmacy owner in
Family Foundations are a type of tax exempt/nonprofit organization that provides tax advantages and control over philanthropic activities. Typically, family foundations are private foundations that get their funding from a small number of sources and they do not conduct widespread fund-raising activities. They may receive gifts from limited sources and friends. Family members serve the foundation as officers, trustees, and directors. They can make grants or donations to other organizations as private foundations. Having a Family Foundation provides a great deal of benefits including income tax deductions, exemptions from gift and estate taxes, and elimination or reduction of other taxes.
One strategy, but not the only one, 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 (CO 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 to be aware of the different tools that are available in structuring a business transaction. They should also be aware that only a professional with vast experience in CRTs should be used to setup a Charitable Remainder Trust. Not following the strict IRS guidelines could be cause for increased taxes, penalties, and in some cases criminal charges.
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.
When you are considering selling your independently owned pharmacy or a small drug store chain, you should consult a firm with extensive experience in
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