By its very definition, tax-efficient investing refers to minimizing the taxable impact of your investment decisions. Remember, it’s not what you make; it’s what you keep. In our opinion, investing without being mindful of the tax consequences is imprudent.
When the government policy is to encourage behavior or commerce, incentives are created. There is no better incentive than to let people keep their hard earned cash by reducing their tax bill.
Proper tax planning should do two things: reduce your taxes while you are alive, as well as after you die. Permanent life insurance gives you the potential to cover these two bases at once. You can transfer your assets income tax and estate tax free to beneficiaries and also build up tax-deferred growth of cash inside the policy.
A 1031 Exchange allows the deferral of federal capital gains tax and most similar state taxes on the disposition of investment or business property, providing a taxpayer more money to invest into qualified replacement property.
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