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Running Towards the Roar

By TaxWealth -

Did you know that the older male lions do not hunt? The females and the young males do the hunting and when stalking a gazelle on the savannah, the entire pride splits into two groups. The older lions, too slow and with teeth and claws too brittle with which to hunt, circle around to one side of the gazelles and crouch down while the females with the younger males go to the other side.  When all the lions are in their positions, the older male lion roars. The frightened gazelle naturally runs away from the roar but into the waiting claws of the female and younger male lions. What would happen if that gazelle instead ran toward the roar?  Most likely, all it would get is gummed.  That roar was merely an illusion.

Too many taxpayers function in needless fear. They think that if they do anything to reduce taxes, they will raise the roar of the Internal Revenue Service and be attacked.

Years ago while thumbing through my mail, I noticed the corner of a brownish colored envelope peeking out from under the other multi-shaped cards and packets. It read INTERNAL REVENUE SERVICE. Instant FEAR bolted through my brain, my heart immediately began to pound in my chest and I was sure my blood pressure soared into orbit. As is the same for vast numbers of other American taxpayers, I associated that name with extreme mental anguish and pain. It turned out to be nothing more than an informational update with an extra set of quarterly estimated tax forms.

Too many taxpayers function in needless fear. They think that if they do anything to reduce taxes, they will raise the ire of the IRS and get attacked. For owners of real estate and other appreciated assets, the fear of having to pay huge amounts of capital gains and other types of taxes is often the deciding factor that keeps them from confidently moving forward to market and sell their properties.

That is a fear that really has no substance to it.  Why?  Because Congress through the years has given us laws specifically designed to reduce, defer and sometimes even to eliminate income and capital gains taxes.  The IRS, however,  will never reveal what they are.  Consequently, it is left up to us to mine out in  tax law what the most viable options are that have been given us to solve the tax problems.

Investigate your tax planning options and implement the ones that you know are supported by law.

Discover – Plan – Verify – Implement

If you have appreciated real estate or other capital assets that you would like to sell and would like to maximize your profit and income benefits, it is worth discovering what options are available to you for your circumstances. Following these steps will prepare you to be better informed on how best to approach the sale of your property and achieve  your goals.

  • Discover – Be proactive. It is essential to first identify what your true tax problem is and then search out in tax law the most viable options available to eliminate, defer or reduce the taxes for the year of sale.
  • Plan – Once you have identified your tax planning options, develop a specific action plan to implement those choices that best fit your specific circumstances and are supported by law.  Keep in mind also that, with few exceptions, tax law demands that the solutions should be put in place prior to signing a sales agreement and, preferably, even before listing the property for sale.  Therefore, be methodical.  It is seldom that you ever need to rush in putting the steps in place.
  • Verify – Before implementing the plan, verify the authenticity of the solutions through your CPA or other independent tax and legal authorities.
  • Implement – You can now confidently initiate your plan to sell your property because you have made a truly informed decision based on fact with the added bonus that it has been independently verified.  Any fears you might have had will transform into confidence as you move forward to solve the tax problem and enjoy more profit and income at close of escrow.

So, if you think you hear the approaching roar of the IRS and are tempted to run in fear, do the opposite.  It is just an illusion. Run towards the roar.

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