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Before You Sell Your Business or Property, Consider These Things...

February 20, 2014

Are you considering selling a business or major piece of property this year? There are several things that you should review before you sell, particularly if there are charities that you support, because once you sign on the bottom line it may be too late and you could be missing out on some significant benefits. Here are five areas to consider before you sell.

1.      CURRENT TAX CONSEQUENCES. There are several different taxes that can occur with the sale of an appreciated asset such as a business or piece of property. Capital gains tax at the federal and state level, depreciation recapture, ordinary income tax, etc all taxes are not created equal. Many times the way a sale is structured can have significant tax consequences. Before you sign on the dotted line, review the taxes you will owe from the sale with your accountant. If you are going to owe any tax, would you allow us at The New Horizons Foundation to compete for the government’s share of your transaction? The New Horizons Foundation specializes in creative charitable techniques that can often turn tax dollars into charitable dollars that you can use in a Donor Advised Fund.

2.      FUTURE TAX CONSEQUENCES. If you plan to invest the principal you receive from the sale of your business or property so that you can live on the income now or in later years, tax planning now, before the sale of the asset, can in many cases reduce the future tax on the income you will receive by as much as 50%. The New Horizons Foundation also specializes in future tax planning that can often turn future tax dollars into charitable dollars. Would you allow us to compete for the government’s future share of your income so that you can use it in a Donor Advised Fund?

3.      SPREAD THE WEALTH. Before a sale is a great time to look at dividing up an asset and spreading the wealth among children and charitable entities. Often an asset, such as a business or piece of property, can be restructured to allow you to divide up the sales proceeds among family members and tax-exempt charitable entities which can affect the tax consequences, future exposure to creditors and remove future asset growth from your estate while still allowing you to maintain control. In our 25 years of experience at The New Horizons Foundation we have helped dozens of families plan successfully for their future and the charities that they love.

4.      REVIEW YOUR ESTATE PLAN. Often the sale of a business or piece of property will have major ramifications on your estate plan. The tax laws have changed significantly in the last three years and so before the sale of a business or piece of property is a great time to review your estate plan and structure things for the future. With 30 years of experience as an estate planning attorney, Bill Moritz, The New Horizons Foundation’s Executive Director, can help you get things updated and give you creative ideas about how to best structure your estate going forward.

5.      DOING GOOD AFTER DOING WELL. The sale of a business or major piece of property is often a good time to consider making some changes in your life, so that you can give back for what you have received. It can be a time of doing good for others after you have done well for your family. At The New Horizons Foundation, we sponsor over 300 charitable projects both in the US and around the world and we are passionate about helping people use their time, treasure and talent to change the world. You can be involved in your spare time, part time or full time, we have the experience, you bring the vision.

The New Horizons Foundation has been in operation for 25 years, sponsored over 400 projects and invested over $100,000,000 in charities and charitable projects in the US and around the world, we have the experience that you need. We specialize in helping successful families make the most of their time, treasure and talent to change the world. The problems of today are mammoth and nonprofit organizations are tiny by comparison. Old solutions are not always adequate to solve today’s problems and so we specialize in creative solutions. You bring the vision, we will supply everything else! We would be happy to discuss your situation and give you a no obligation review of different ways that you might consider structuring your sale to accomplish your goals and objectives.

New Horizons Foundation

The New Horizons Foundation, founded in 1989, is a nonprofit, tax-exempt, public charity, organized and operating under the laws of Colorado for the purpose of helping individuals accomplish their charitable objectives in religious, educational, scientific, benevolent and health related activities.  Read More