Retaining Your Wealth Once You Have Created It

This is a follow-up post to my blog post this month regarding keeping and maintaining your wealth.  The ability to retain your wealth after you have generated it is just as important as your ability to create and build your wealth, otherwise you are merely spinning your wheels. 

Minimizing Your Income Taxes

Deferring the payment of your income taxes, especially your capital gain taxes, is one of the most important techniques for keeping, retaining, and maintaining the wealth that you have spent your lifetime creating and building. 

You should devote a sufficient amount of time for income tax planning and becoming familiar with the various income tax planning strategies available for deferring the payment of capital gain taxes when you sell your business, real property or other property or assets.  Income tax planning should be an integral part of your overall wealth and legacy planning. 

1031 Tax Deferred Exchanges

Perhaps one of the most common tax deferred strategies used today is the 1031 tax deferred exchange that allows you to sell one or  more existing properties and acquire one or more new properties.  It is relatively straight forward.  You are permitted to defer the payment of your capital gain taxes and your depreciation recapture taxes as long as you trade equal or up in value compared to what you sold.  In other words, you must completely reinvest your total value (investment) in replacement property.