Case Study
Legacy Ranch

Selling highly appreciated rural land—like a legacy ranch in Texas—can trigger a substantial capital gains tax, even in a state with no personal income tax. Federal long-term capital gains, depreciation recapture, and the 3.8% net investment income surtax can combine to consume a significant portion of sale proceeds. For landowners wishing to exit, preserve liquidity, or reinvest outside of real estate, traditional strategies like 1031 exchanges offer limited flexibility and often fail to maximize wealth retention.

The TaxWealth Approach

TaxWealth enables property owners to exit valuable assets without being forced into a reinvestment strategy or giving up liquidity. By strategically structuring the transaction to postpone the timing of federal tax obligations, clients preserve more of their wealth at closing. This approach increases usable capital, maintains full tax compliance, and provides the freedom to direct proceeds according to their financial and legacy goals.

The Problem

A ranch owner sold a legacy property in Texas for $9,000,000. Under a conventional sale, the tax liability totaled $1,950,490, leaving just $6,599,510 in proceeds. Nearly a quarter of the sale proceeds were lost to taxes, limiting liquidity, reducing optionality, and restricting the owner’s ability to reinvest or redeploy capital.

The Solution

TaxWealth’s planning strategy enabled the client to legally delay federal tax payments and receive a net distribution of $7,998,563. After setting aside funds for future obligations, they retained $7,658,962 in usable capital—achieving an 83% first-year tax savings and realizing 16% more retained value than through a conventional sale.

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