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 Income Tax FIRPTA automatic withholding tax on sale of property 10 of gross AND 3 33 additional in California 6 million sale 799 800 in California  No capital gain tr

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 Income Tax FIRPTA automatic withholding tax on sale of property 10 of gross AND 3 33 additional in California 6 million sale 799 800 in California  No capital gain tr Powered By Docstoc
					   Income Tax: FIRPTA automatic withholding tax on
    sale of property. 10% of gross AND 3.33%
    additional in California. ($6 million sale, $799,800
    in California).
   No capital gain treatment on sale. Ownership of
    US real estate is considered a trade or business and
    taxed at higher rates. Maximum rate 35% or
    higher.
   US estate tax owed on net value of real estate in
    the event of the foreign owners death. Maximum
    rate 45%. Only $60,000 of value can pass without
    estate tax.
     Income is taxed at a flat 30% fed rate
      California is taxed at flat 7% flat rate
    Alternative: foreigner can elect to report
Ownership as a trade or business, and p ay tax at
 marginal ordinary rates: (15%-35% federal, and
 9.9% California. This allows for deductions to
             reduce taxable income.

  There is no capital gain lower tax rate for foreign
            ownership of US real estate.
        U.S. Real estate value in 2011 $6 million
               Non-U.S. citizen/resident
           Purchased in 2009             5 million
               Foreign person dies in CA:
           Statutory fees for attorney     $73,000
            Fed. Estate Taxes          $2,415,800
                     (due within 9 months)

Most likely the U.S. real estate will have to be sold to pay the
                     fees and taxes due!
Income Tax Strategies:
     1. Keep ownership interest at fixed value.
  Amount determined by US estate tax limits.
  $60,000 allowed for Nonresident alien. No FIRPTA.
     2. Create a creditor position for growth potential
  in property. No FIRPTA.
     3. Participate in a captive insurance program to
  insure your real estate ownership. This provides
  valuable deductions for income producing real
  estate and removes taxable equity build upon sale.
  Also provides asset protection for foreign owner.
Estate Tax Strategies:
    1. Set up an LLC to own the real estate and have
 the LLC owned by a foreign corporation.
    2. Have the foreign owners interest in the foreign
 company held in trust for their benefit.
   (This can be in an asset protection or dynasty trust)

 This removes the US real estate from the US estate
 tax system. No death taxes due. Provides asset
 protection and continuity for the foreign owners
 family .NO FEES OR TAXES
 DUE. SAVE $2,488,880
   Foreign Person                                     US Real Estate
                        Delaware LLC
   Sets Up LLC
                            buys



                    Foreign person is LLC Manager.
                    Foreign person has fixed equity position in LLC.
                    Member (Owner of the LLC ) is a
                    Foreign Company. It loans to LLC to buy.

Foreign company Formed in Zero tax Jurisdiction. Owned by trust for foreign
person and their family. LLC is structured with you as manager—right to
management fee. Foreign corporation ownership value in the LLC grows with
little gain. NO FIRPTA OR CALIFORNIA WITHHOLDING.BECAUSE YOU HAVE
A CREDITOR POSITION AND ASSET PROTECTION.
Delaware LLC pledges real estate for a private placement captive
insurance contract for the foreign owners. Deed of trust is placed on
real estate and UCC financing statement filed on LLC in favor of private
    real estate insurance contract.
.


Pledged to
Cover Premiums             Private Real                All ownership & value
Due for Business              Estate                   In the protected cell
Liability Insurance on      Insurance                  Belongs to foreigner
Real Estate                  Contract                  And their family
   This is not commercial insurance. There is a
    private licensed captive insurance company in
    Belize. Licensed to offer business liability
    insurance for business owners.
   The business owners contract and rights are held
    as a separate protected cell under the main
    company. No assets are commingled with others
    insured.
   Business owner can determine the risks to insure,
    what premiums are paid and when and how
    premiums are invested.
   Approved structure under IRS guidelines.
1.   Join our program now and own and operate U.S. real estate in
     the most tax effective way possible.

2.   Protect yourself from creditors

3.   Maintain privacy and confidentiality.

4. Take control of your future and reach economic goals.
   1.   Delaware LLC pledges real estate for a private
    placement captive insurance contract to protect equity.
    You own the rights to the contract (equity stripping)—
   nothing to tax in the U.S. or assets for a creditor to seize.

2. All ownership and value in the protected cell belongs to
                    you and your family.

				
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Description: Real Estate Capital Gain Tax Rate document sample