By Brad MacLiver
Authorship and profile at Google
Almost everything you own and use for personal, or business, purposes is a capital asset. When MD 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 ofMaryland pharmacy acquisitions, they usually do not know these federal regulations that allow for reducing the tax liability for the Maryland
During this period of history where it is more difficult to finance a business, MD pharmacy sellers may already be required to lower their asking price, so a pharmacy buyer can qualify for the financing required. On top of the lower offers they will be required to pay higher percentages in taxes.
This is a dilemma for the pharmacy seller who wants as much money out of the deal as possible. For most pharmacy owners their business is the largest asset they will ever own and selling the business at a certain dollar amount has been part of their retirement and estate planning. Knowing they will need to cut out a larger chunk of the proceeds to give to the government will cause some pharmacy owners to reconsider their retirement plans. The good news is there are financial tools and strategies that allow the pharmacy owner inMaryland
Family Foundations are tax exempt/nonprofit organizations, which provide tax advantages and control over philanthropic activities. Family foundations are typically private foundations that are funded by a small number of sources, and do not conduct widespread fund-raising activities. They may receive gifts from friends and limited sources. Family members serve as trustees, directors, and officers. As private foundations they can make grants, or donations to other organizations. Creating a Family Foundation provides a variety of benefits, including income tax deductions, exemptions from gift and estate taxes, and the reduction or elimination of other taxes.
Another strategy that is currently available to assist with the burden of capital gains tax is the Charitable Remainder Trust (CRT). These are legally described as Split Interest Trusts, a term that is used due to the blend of philanthropic motivations and personal financial aspects. CRT’s are capable of decreasing tax liabilities, increasing a business owner financial wealth, and simultaneously provide for a vehicle give to charity.
CRT’s are created when a person donates assets into this unique type of Trust. These assets can be stocks, cash, real estate, etc. The CRT is set up for a set period of time, or until the donor’s (pharmacy owners) death. An individual (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 MD 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.
You should consult a firm with extensive experience in pharmacy and drug store acquisitions inMaryland
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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 MD 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, MD pharmacy sellers may already be required to lower their asking price, so a pharmacy buyer can qualify for the financing required. On top of the lower offers they will be required to pay higher percentages in taxes.
This is a dilemma for the pharmacy seller who wants as much money out of the deal as possible. For most pharmacy owners their business is the largest asset they will ever own and selling the business at a certain dollar amount has been part of their retirement and estate planning. Knowing they will need to cut out a larger chunk of the proceeds to give to the government will cause some pharmacy owners to reconsider their retirement plans. The good news is there are financial tools and strategies that allow the pharmacy owner in
Family Foundations are tax exempt/nonprofit organizations, which provide tax advantages and control over philanthropic activities. Family foundations are typically private foundations that are funded by a small number of sources, and do not conduct widespread fund-raising activities. They may receive gifts from friends and limited sources. Family members serve as trustees, directors, and officers. As private foundations they can make grants, or donations to other organizations. Creating a Family Foundation provides a variety of benefits, including income tax deductions, exemptions from gift and estate taxes, and the reduction or elimination of other taxes.
Another strategy that is currently available to assist with the burden of capital gains tax is the Charitable Remainder Trust (CRT). These are legally described as Split Interest Trusts, a term that is used due to the blend of philanthropic motivations and personal financial aspects. CRT’s are capable of decreasing tax liabilities, increasing a business owner financial wealth, and simultaneously provide for a vehicle give to charity.
CRT’s are created when a person donates assets into this unique type of Trust. These assets can be stocks, cash, real estate, etc. The CRT is set up for a set period of time, or until the donor’s (pharmacy owners) death. An individual (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 MD 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.
You should consult a firm with extensive experience in pharmacy and drug store acquisitions in
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