California treats capital gains as ordinary income, and the amount of California capital gain tax is not dependent on the holding period of the capital asset.A California resident who moves to Nevada, Florida or other "no-tax" state (and becomes a non-California resident) only pays a 15 percent federal capital gains tax (rather than the 21.04% blended California and federal tax, and the 1% individual California surtax).
since taxable years beginning on or after July 1, 1987.There is no lower California capital gain rate for corporations or for individuals.It is important to note that if under age 59 ½, an additional 10% early distribution penalty tax will be due on taxable annuity distributions unless the owner qualifies for an exemption from the IRS penalty tax.The vast majority of deferred annuities have surrender charges if taking a distribution during the surrender charge period of the policy, which usually lasts from as short as 4 years to as long as 20 years.This 2006 Tax Act extends the 15 percent federal capital gains and dividend rate for two additional years until December 31, 2010.
These lower tax rates reduce the federal tax cost of selling a business.
The benefits of annuities are often overshadowed by their negative qualities—especially their notoriously high expenses and illiquidity.
While annuities make sense for some, they are not the best choice for everyone.
As its name implies, an active fund management style is more aggressive than passive fund management style.
This covers the costs of maintaining and administering an account during the accumulation phase.
Careful tax structuring of the selling entity, spinning off the selling entity's assets and properly allocating the purchase price among sold assets, intangibles and employment agreements will maximize the tax benefits to clients who sell or purchase a business.