Los Angeles Tax Attorney Bruce Givner Discusses Strategies Used by High Wealth Individuals to Legitimately Decrease Their Taxes: Part 1

by Bruce Givner on June 27, 2012

Between GOP Presidential candidate Mitt Romney and billionaire American business magnate Warren Buffett, Americans are aware that the top .02% of the top 1% of the wealthiest taxpayers pays a smaller percentage of tax than the remaining top 1%.  “Most of the income received by this small group of approximately 400 taxpayers is from dividends and capital gains,” noted Los Angeles Tax Attorney Bruce Givner, “and the tax strategies used by the very rich, can also be used by individuals with less wealth.”  An experienced tax attorney can devise a plan to legitimately decrease taxes.

Escaping Estate Tax
A Grantor Retained Annuity Trust (GRAT) is a legitimate way to transfer assets to children at a low, and possibly zero, gift tax and keep those assets out of the parents’ taxable estate.  Said Los Angeles Tax Attorney Givner, “The parent sets up the GRAT with the children as the contingent remainder beneficiaries.  The parents contribute a valuable asset to the GRAT.  The GRAT pays the parent a stream of payments for a fixed term of years.  If the parents survive the term of years that they select, the asset passes to the children free of income tax, free of any further gift tax and remain outside the parents' taxable estate.  If the asset appreciates faster that the payout rate to the parents, the excess appreciation passes to the children free of estate and gift taxes."

Deferred Compensation Plan

A sophisticated tax attorney can create a deferred compensation plan to legitimately decrease taxes.  Compensation that a tax attorney will often suggest to defer is pensions, stock options, and retirement plans.  Under a deferred compensation plan, the individual receives income at a future date, generally at a time when their individual tax rates are lower.

Givner & Kaye focuses on sophisticated estate planning and asset protection plans in Beverly Hills, Calabasas, West Los Angeles, Hollywood, and other areas of Los Angeles County.  On the first and third Thursday of every month, Givner & Kaye hosts its MCLE & CE accredited series - "Thursday Insights."   On June 21st, join Givner & Kaye for insights into “The Five Most Common Business Frauds that Every Business Should Know.”  Call Los Angeles Tax Attorneys Givner & Kaye at (310) 207-8008 today.

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