Free Wealth Management Guide Financial Strategies For Selling A Farm Or Ranch | Page 6
1031 Exchange, CRT, AND ILIT
TAX & ESTATE PLANNING ANALYSIS
Sale Price: $15,000,000
Land
Building
Equipment & Livestock
Raised Livestock
Total
$14,000,000
93.33%
$100,000
0.67%
$600,000
4.00%
$300,000
2.00%
$15,000,000
Accumulated Depreciation
$1,200,000
0
$100,000
$100,000
$700,000
$700,000
0
0
$2,000,000
$800,000
Basis
$1,200,000
0
0
0
$1,200,000
($5,000,000)
($5,000,000)
0
0
0
0
0
0
($5,000,000)
($5,000,000)
$3,657,143
$100,000
$600,000
$300,000
$4,657,143
0
$100,000
$600,000
0
$700,000
$3,657,143
$3,657,143
0
$100,000
0
$600,000
$300,000
$300,000
$3,957,143
$4,657,143
Long Term Capital Gain (15%)
Total Federal Tax
0
0
$548,571
$548,571
0
$25,000
0
$25,000
$210,000
0
0
$210,000
0
0
$45,000
$45,000
$210,000
$25,000
$593,571
$828,571
Recapture Rate (6.9%)
Capital Gain (4.9%)
Total State Tax
0
$179,200
$179,200
$6,900
0
$6,900
$41,400
0
$41,400
0
$14,700
$14,700
$48,300
$193,900
$242,200
Total Tax Liability
$727,771
$31,900
$251,400
$59,700
$1,070,771
$662,550
$100,000
$600,000
0
$1,362,550
$99,383
$50,015
$25,000
$6,900
$210,000
$41,400
0
0
$334,383
$98,315
$578,373
0
0
$59,700
$638,074
Net Cash After Tax
$3,421,626
$100,000
$600,000
$240,300
$4,361,926
Effective Tax Rate
7.14%
Sales Price Allocation
Original Cost
1031 Exchange
CRT
Realized Gain
Recapture Gain
Capital Gain
Projected Tax
Federal
1245 Recapture Gain (35%)
1250 Recapture Gain (25%)
State
Charitable Deduction
Charitable Contribution (Tax Savings)
Federal
State
Net Tax Liability
CASH FLOW
Projected Annual Income (Cash Investment)
Projected Annual Income (1031 Investment)
Projected Annual Income (CRT Investment)
Less: ILIT Premiums
$305,335
$350,000
$350,000
(135,000)
Total Annual Income
$870,335
6