Converting home equity into cash: a comparative analysis of reverse mortgages and sale-leasebacks

Article Abstract:

Two estate planning techniques are available for cash-poor senior citizens who own most or all of their homes mortgage free: reverse mortgages and sale-leasebacks. Both techniques have advantages but, for homeowners with heirs who can buy the home, sale-leasebacks are the better option for both the homeowner and heirs. A sale-leaseback will allow the homeowners to exclude gain up to $125,000 from their income if certain conditions are met and results in deductible rental income. Reverse mortgages are subject to government limitations, but the borrowed funds are not taxable.

Analysis, Sale-leaseback transactions, Sale and leaseback, Reverse annuity mortgages, Reverse mortgages

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Getting out the vote: the use of voting rights in tax planning

Article Abstract:

Disproportionate voting rights properly utilized by affiliated parties can be a powerful tax planning tool in handling tax-free reorganizations, recapitalizations, and similar strategic transactions. Voting power generally has been determined by the right to elect directors. Although statutory language and IRS guidance allow the use of disproportionate voting power, tax planners must be aware of the relevant limitations on directors' rights and elections, as well as potential voting rights restrictions.

Usage, Taxation, Affiliated corporations, Voting rights (Stockholders)

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New capital gains tax rules offer planning opportunities

Article Abstract:

Capital gains tax rates changed under the provisions in the 1997 Taxpayer Relief Act. Nine rate changes were introduced by the legislation. A tax planners should evaluate a taxpayer's investment mix, possible use of backloaded IRAs, and certain tax-deferred investments. The so-called granny rate, loss computations, recapture, and options were also discussed.

Public Finance Activities, Personal Taxes-Capital Gains, Laws, regulations and rules, Personal income tax, Capital gains tax

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