We take Tax Planning into consideration when creating each client’s
individualized, customized, and tailored Asset Protection plan. Each structure,
whether Domestic or International varies when it comes to tax planning.
It is essential to know how your assets will be taxed before setting up
With Intentional Asset Protection, there are potential tax advantages.
If you create an international trust, you must report the amount of money
in it to the IRS. However, you will not need to pay taxes on it until
you take money from the trust and transfer it to the U.S. In addition
to this tax benefit, offshore trusts protect your assets from lawsuits
Limited partnerships have several tax advantages. The first is that partners
can distribute partnership income, gain, loss or credit among the partners
however they see fit. This will depend on your operating agreement, but
the distributions do not necessarily need to be proportional. Therefore,
a partner can receive a disproportionately large share of partnership
gain or loss and receive the tax benefits that come with it. A partnership
can distribute appreciated or depreciated property to a partner without
recognizing gain or loss. This means that it is not required to reevaluate
the property or pay capital gains tax on an appreciated property. Another
key advantage is that distributions to limited partnerships are not subject
to burdensome self-employment taxes.
Corporations can be taxed as a C corporation or S corporation. Most people
find it ideal to be taxed as the S corporation. In this case, only the
owners are taxed through corporate tax status. In comparison, C corporations
pay a tax on profits and their shareholders are taxed when receiving a
distribution. It is important to note that the criteria for a corporation
to be taxed as the S corporation can significantly narrow the options
for Asset Protection.
Limited Liability Companies (LLCs) can be taxed as a C corporation, S corporation,
or a partnership. Taxation as a partnership may be the most desirable
choice because it avoids the taxations faced with C corporations and avoids
the business restrictions on S corporations.
Lastly, LLCs can be structured as disregarded entities to be ignored for
taxes. A disregarded entity LLC that holds a non-income producing property
does not need to report its income for federal and most state tax purposes.
This can be a helpful strategy to maintain privacy. An international LLC
that is structured as a disregarded entity will reap the benefits of international
protection while facing less reporting requirements than an international trust.
For more information on Tax Planning and Asset Protection, contact The
Presser Law Firm, P.A. for a complimentary preliminary consultation.
The Presser Law Firm, P.A.
6199 N. Federal Highway, Boca Raton FL 33487
(561) 953-1050 or e-mail