[Jackie Lange]

Jackie Lange

Some tricks are so good they can only be shared in the MEMBERs section.. like this one..

Corporations are legal entities with completely separated
existences from humans or stockholders. They have different tax
years and tax rates. They even have built in “tax havens” in the form
of pension plans, thus they are excellent devices to help avoid the
capital gains and alternate minimum tax under the proper
circumstances.

Consider a F&C $300,000 house with a basis of $150,000.
Taking a cash sale in any year personally would trigger both
capital gains and alternate minimum taxes. Here’s one strategy.

1. Contribute an OPTION to purchase the house for $150,000 to
your corporation as paid in capital. The Option price is for $1.00.
This is a tax-free move.

2. Fully disclose the corporate Option and offer the property for
sale to a user for $150,000 who is willing to give up future profit in
return for avoiding a big loan and commensurate loan payments.

3. Subordinate the Corporate OPTION to any financing needed to
complete the transaction to cash out the equity over the Option.

4. In another year, the Corporation can sell the Option at market
value to the occupant or to another investor. The profit received on
the Option could be contributed by the corporation to your qualified
corporate pension plan. This would be deductible to the corporation
and not be income to you. Thus, there would be neither corporate
nor personal taxes on the total transaction.

5. Or the corporation can exercise the Option and take title to the
residence subject to any loans. Under Code Section 119, it can
provide housing pursuant to an employment contract it has with you,
to provide housing; the cost of which is deductible to the corporation
and tax free to you.

6. Or, once the Option has been held one year, the corporation
could sell it tax free if it used the proceeds to buy Options on other
property, or to buy other property, pursuant to IRC Section 1031.

The Option serves to reduce taxes, divide tax liability from
entity to entity, and place the tax effect into more than one
taxable year,