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Increase Return on Sale with CMAES

1031 Exchange Services - Transportation And Equipment Exchanges

Increase Return on Sale with CMAES

The dilemma that faces every business owner is how to maximize the value of their business. Optimally, a business owner would like to be able to sell and/or retire comfortably. For a lucky few, the after-tax return is more than they can spend or give away. For everyone else, advanced tax and business strategies are necessary to maximize their after-tax returns from the sale of their businesses.

Tax strategy is significant because taxes are the single largest cost of operating a business. By avoiding unnecessary taxes on the sale or transfer of the business, the owner and his/her family keeps more of the wealth that has been generated.

There are three major ways tax laws can enhance after-tax returns from the sale of a business:

  • Exclude earnings from taxation, such as 1031 exchanges and sales of a personal residence.
  • Continuously reinvest tax sheltered earnings over time, such as in an IRA, a pension or profit sharing plan.
  • Lower the rate of tax on the compounded earnings, from ordinary income, taxable at 35%, to capital gains, taxed at 15%.

CMAES (Continuous Multi-Asset Exchanges) accomplishes each of these tax strategies. All gains from sales are sheltered from taxes; the sheltered gains can be reinvested tax free. When sold later, these gains are taxed at lower tax rates by elimination of the recapture.

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