DEFERRING CAPITAL GAINS TAXES WITH THE PREMIER VI PRIVATE ANNUITY TRUST^©

TAXATION:

Taxation:
The tax ramification is that the exchange is not immediately taxable. Under IRS rules the annuitant is taxed only on payments actually received, as they are received, and not all up-front on the entire amount. This is similar to making an installment sale, then paying taxes only on the installment payments as they are received. If the annuitant chooses to defer his annuity, that is wait for some period of time before payments begin, there will be no taxes during the deferral period because no money is received. Once payments begin, whether immediately or at some deferred period, there will be a proportionate amount of taxes owed on each year’s payment. For details of how the payments are taxed, see the later topic, Annuity Payments (Figure 8).

Taxation When A Trust Liquidates Property:
The tax ramification to the trust's liquidation of the property is: Zero taxes. That is due to the fact that, in this example, the trust sold the asset for $1,000,000 to the outside buyer, and the trust paid $1,000,000 to the annuitant, by means of the private annuity contract. That leaves zero gain to the trust, and zero taxes.

THE C.G. TAX PROBLEM
TAXATION
DEFERAL OF PAYMENTS
COMPARE A TAXED SALE
ANNUITY PAYMENTS
DEPRECIATION RECAPTURE
BENEFITS

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