Federal Taxes
- Reduce taxable income through income shifting and deferrals.
- Increase tax deductions.
- Maximizing the tax deductions offered by charitable gifting.
- Minimize taxes on investment assets through tax loss harvesting and the use of tax efficient investments.
- Certain investments, such as oil & gas, may provide significant tax deductions.
- Determining the proper business structures (ie: C-corp, S-corp, LLC, etc)
- Maximize the use of retirement plans.
- Conservation Easements.
State Taxes
- Tax Credits – In the state of Virginia, tax credits can be created through conservation easements and by rehabbing old buildings in historic or enterprise zones. Virginia and Colorado are the only two states in the country that allow for the sale of tax credits.
Landowners may protect their property from certain activities (like development) by installing a restriction on their deed. This process is known as a conservation easement and permanently prohibits those activities on that property. Other property rights not defined under the easement remain as before the easement. The creation of an easement generally reduces the property value, thereby reducing the value of your estate and possibly the property tax as well. The easement is sold (or donated to a charitable organization) allowing you to take a deduction on federal and state income taxes. The property should be appraised by a qualified conservation easement appraiser to establish the value before the easement is created. The appraiser would then be able to valuate the property once the easement restrictions are put into place, establishing the value of the easement or donation. Generally, conservation easements reduce the property values by 15%-45% based on the property attributes along with what rights of ownership are “given up.”The landowner may take a deduction of up to 30% of their federal adjusted gross income for the year. The deduction may be carried forward for 5 years, should the full value not be deducted in the first year. Virginia landowners may take a tax credit up to 40% of the easement fair market value to $100,000 per year, but cannot exceed the tax liability for that year. The unused credit may be carried forward for a period up to 5 years, or sold usually at a discount through a conservation easement broker. The easement will lower the estate taxes that a landowner’s heirs would have to pay, also. It will reduce the aggregate value of the property for estate tax purposes and provides for an estate tax exclusion.
http://www.virginiaoutdoorsfoundation.org/
What are Historical Tax Credits?
The preservation of historic buildings benefits communities. Historic places connect us to our heritage and enrich the quality of our lives in countless intangible ways, but their preservation also provides demonstrable economic benefits. Through the federal and state Rehabilitation Tax Credit programs, property owners are given substantial incentives for private investment in preservation, resulting in enormous advantages to the public.
http://www.dhr.virginia.gov/tax_credits/tax_credit.htm
Disclosure: This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Investors should consult a tax or legal professional regarding their individual situation.