Case Studies

Problem

A successful medical practice owner faced a 40% effective tax rate on the sale of her business for nearly $5 million. Her projected federal and CA state income tax bill was projected to be more than $1.9M.

Tax Wealth Network Solution

Using our Tax Clarity Tax Planning Module, we completed a Pre-Sale Tax & Income Analysis and discovered several ways to mitigate her first year tax bill, which allowed her to have more to invest for her other goals. The impact of having $1.9M more to invest could result in an additional $8M in ten years if invested for an average 6% rate of return. She was able to accomplish this by utilizing a combination of a special business trust and an Opportunity Zone (OZ) Fund investment. This resulted in shifting how income was to be received as installments over time. And, the OZ Fund will result in no capital gains on the growth of this portion of the investment if held for the required time period