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Tax-Free Sale with a Unitrust

Tax-Free Sale with a Unitrust
Disclaimer: The following testimony is not from an actual Dallas Seminary donor, but illustrates an example of how the Foundation might help a donor bypass capital gains tax, increase their income, and receive a charitable deduction.

Over the years, the town has grown and development has moved toward their property. Their land is now next to a large commercial store, and they have leased the property to the store for overflow parking.

BILL: We have owned this property for over 10 years. It has been a good investment and increased in value. We have received just enough rental income in the last few years to pay the taxes. However, now we would like to sell.

LAURA: Our tax advisor has told us that if we do sell the land there would be a large capital gains tax. It would be nice if we could sell it without paying a lot of tax. We could also use some tax deductions this year.

The good news is that Bill and Laura can use a special trust to receive three very nice benefits. The benefits are:
  • Bypass capital gains tax
  • Increase income
  • Receive a charitable deduction
BILL: We are delighted with our trust. The trust is called a unitrust. With our unitrust, we saved about $36,000 in capital gains tax and almost $18,000 in income taxes plus we received a charitable deduction. That is over $54,000 in tax savings!

LAURA: We also increased our income. After property taxes, the land was producing almost no income before. Now, we receive over $12,000 in income each year. This increased income is one of my favorite parts of the plan.


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