Why Kole Realty Inc

The sale of your property is only the beginning. The unique plan we design for your real estate journey will help you accomplish what matters most to you. These 4 steps will illustrate how you might fund your lifestyle and create legacy wealth.

STEP 1 - Structured Installment Sale rather than a traditional sale

The IRS code 453 allows a Structured Installment Sale to reduce the amount of capital gains taxes you (as the seller) would have to pay on your net proceeds at the end of the tax year. Capital gains taxes in California are as high as 37.1% (local, state and federal). Capital gains taxes are added to your other income to determine the total percentage owed. To lower the percentage owed in any one year, the net proceeds are put into an Annuity for 5 or more years. Deferring and spreading out over subsequent years the capital gains taxes that would be owed if paid on the total net proceeds in the year of sale. The seller (client) may also keep some cash out of the net proceeds (pay taxes on that amount at the end of the tax year) and put the remainder into the Annuity. Whatever amount funds the Annuity is not taxable until payments are released to the client. The amount of Annuity payments received is added to other income and taxes payable based on client’s tax bracket.

STEP 2 – ANNUITY to postpone capital gains taxes

The structured installment sale allows the net proceeds to fund an Annuity. This step prevents you (the seller) having to pay capital gains taxes on the total lump sum at the end of the tax year. The interest rate earned on the annuity is at 4% and is set up for a minimum of 5 years. The annuity we use is provided by one of the nation’s top insurance companies. With strategic planning we help you determine the amount and frequency of the payments you receive. This step minimizes the capital gains taxes charged on your net sale proceeds in each subsequent year. Annuity payments received are added to your other income, taxed and payable based on your tax bracket at the end of each tax year. The Annuity may fund your lifestyle and be structured to fund an Indexed Universal Life Contract (IUL) over a 5-year period to create legacy wealth.

STEP 3 – INDEXED UNIVERSAL LIFE CONTRACT (IUL) - Creating legacy wealth

Our most strategic planning for individuals like you goes into creating legacy wealth. The structured installment sale funnels the net proceeds at close of escrow into the Annuity; and the Annuity releases payments on a scheduled bases to fund the Indexed Universal Life contract (IUL). The IUL is provided by one of the nation’s top insurance companies. At the beginning of our relationship, when you tell us about your desire to sell your real estate we establish what matters most to you. This includes the entire process from listing to possibly acquiring another property, limiting tax consequences, funding your lifestyle and creating legacy wealth. The amount of money you designate to establish an IUL is determined long before your property is even sold. When escrow closes the Annuity is funded and the release of payments is determined to begin to fund the IUL. The IUL earns compound interest that is currently averaging 8%; but can never go below zero. Meaning you cannot lose principal due to falling interest rates. Over time the IUL will provide benefits for your loved ones once you pass away. In the meantime, the IUL can also provide a non-taxable LINE OF CREDIT (a loan against the principal value in the IUL) to fund your lifestyle. Thus, the IUL can fund lifestyle and legacy.

STEP 4 – LINE OF CREDIT from the IUL - A Non-Taxable Method to Fund Your Lifestyle

While you probably want to leave a legacy for your loved ones, you also want to live your best life now! The IUL provides a unique strategy to fund your lifestyle. Within 90 days of beginning to fund the IUL, you can borrow up to 70% against the principal balance and use it as a LINE OF CREDIT. The line of credit has an interest rate of 4%. The principal balance in the IUL continues to grow and is not reduced or affected by the amount of the LINE OF CREDIT. You can use all or some of the LINE OF CREDIT and replenish it, then use it again if you choose to do so. You are not required to pay back the LINE OF CREDIT; however, if the IUL is ever withdrawn completely any outstanding line of credit balance would be deducted from the principal balance. As the IUL grows over time you can take out additional LINES OF CREDIT. Any money taken out as a LINE OF CREDIT is not taxable. The IUL grows to create a wonderful legacy while helping you fund your lifestyle.

Why Kole Realty Inc

STEP 1 - Structured Installment Sale rather than a traditional sale

STEP 2 – ANNUITY to postpone capital gains taxes

STEP 3 – INDEXED UNIVERSAL LIFE CONTRACT (IUL) - Creating legacy wealth

STEP 4 – LINE OF CREDIT from the IUL - A Non-Taxable Method to Fund Your Lifestyle

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