Financial Planning Dentist

Asset Based Fees

and up

Additional Service Fees

Replacement Properties
$350/per acquired
Back-to-Back Closings
Rush Fee (inside 48 Hours)
Wire Fee

*Fees for 1031 services are assessed by InSight 1031, separate from the management fees from InSight, Corp., and assessed from the proceeds of the transaction. 

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How do you start saving today for my child’s college fund?

First, ask yourself and your spouse what the end goal is. Although it may seem rudimentary to start here it’s actually quite important. Depending on how much you plan on paying for your child’s education and when you want to make contributions will help decide which savings vehicle will best meet your needs. Is the goal to pay for all or part of tuition and fees? Room and Board? Computer?  It is also important to ensure you’re saving enough for yourself and your family to live on in retirement before funding your child’s education. Even if it’s extremely important for you to pay for your child’s education, the last thing you want is to not have sufficient money to live on in retirement as you can’t get a loan for retirement but you can for education.  You can always pay off the loan(s) of your kid(s) if you have the financial means later in life but if you’re strapped for cash now and you’re putting your kids educational expenses first we would advise you to reconsider your goals and adjust accordingly. If you read our article, Saving Automation 101, this will be a great guide as to how to start saving once you have the vehicle selected. Different savings vehicles have different contribution/withdrawal rules and tax incentives so picking the right one needs to be your first step.  For those that are ready to start planning for education here are the different vehicles that can help you achieve your goals: 529 Plan – College Invest 529 Plan also known as a College Savings Plan, allow for college saving on a tax-deferred basis to any eligible education institution, which is defined by the IRS as “Any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education.”  Distributions from these plans are federal and state income tax-free as long as they are used to pay for qualified education expenses (tuition and fees, books, supplies, and equipment). It can also include room and board for students enrolled at least half-time and cannot exceed the greater of: Allowance for room and board as part of the cost of attendance provided by the school or as part of the financial aid process The actual amount charged if the student resides in housing owned or operated by the university There are no income phase-outs on who can contribute to them and they can be opened to benefit anyone (family or friends) You can contribute up to the annual gift tax exclusion amount of $15,000 for individuals and $30,000 if spouses elect gift splitting per year. Technically, contributors can contribute up to five times the annual gift tax exclusion amount or $75,000 as a lump sum in one year.  If you’re a Colorado taxpayer, every dollar you contribute to a 529 plan can be deducted from your Colorado state income tax return (check your individual state tax incentives) Coverdell Education Savings Accounts – Coverdell Education Savings Account (ESA)  Tax-deferred account created to pay for qualified higher education or qualified/secondary  school expenses For higher education expenses, they include: Tuition, fees, books, room and board, and computer related expenses.  For qualified elementary and secondary expenses, they include: tuition, fees, books, supplies, equipment, tutoring, computer related expenses, and special needs services for special needs beneficiaries Distributions are tax-free if qualified and taxable as ordinary income if they’re not qualified (10% penalty as well for non-qualified distributions) Contributions are limited to $2,000 per beneficiary per year and are not deductible for federal or state income tax purposes U.S. Government Savings Bond U.S. Government Series EE (issued after 1989) and Series I bonds can be redeemed to pay for qualified education expenses with the interest earned on the bonds excluded from taxable income.  Qualified expenses only include Tuition and fees Other Education Vehicles of Funding IRA  Early (before the age of 59.5) distributions from an IRA are usually taxable at the ordinary income level and assessed a 10% penalty; however, when distributions from an IRA are used to pay for educational expenses the penalty is waived but you will still have to pay income tax on the entire distribution Roth IRA Contributions are considered owner’s basis and can be withdrawn at any time without tax consequences Conversions represent pre-tax dollars converted to a Roth IRA (after-tax). However, you may have to wait five years from the date of the conversion to not be subject to a 10% penalty. Earnings represent growth from investing contributions and conversions and can be withdrawn tax-free if the distribution is qualified Qualified distributions include: withdrawals occur at least five years after the Roth was established and funded, the Roth owner is at least 59.5, becomes disabled, or passes away.  UGMA & UTMA Custodial Accounts UGMA (Uniform Gifts to Minors Act) allows minors to own cash or securities UTMA allows minors to own cash, securities, and real estate Both require a custodian of the account (usually a parent or grandparent) to manage the account for the benefit of the minor child These accounts were popular before the creation of the 529 Plan When the child reaches the age of majority (18 or 21 depending on the state) the child can access the account without permission of the custodian Disadvantages: Once the minor reaches the age of majority the funds can be used for anything and the custodian no longer has control of the assets AND the earnings in these accounts may cause a “Kiddie Tax” issue  Employer-Provided Education Assistance Is a program established by an employer to reimburse employees for education expenses (may or may not be directly related to the employees current job duties and will depend on the employers policy) Reimbursement up to $5,250 (2020) which is not taxable to the employee Life Insurance In some cases, cash value life insurance may be used as a savings vehicle for college funding especially if there is a dual need for a death

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Kevin Taylor

Tax Mitigation Playbook: What is a 1031?

A 1031 exchange, also known as a like-kind exchange or tax-deferred exchange, is where real property that is “held for productive use in a trade or business or investment” is sold and the proceeds from the sale are reinvested into a like-kind property intended for business or investment use, allowing the taxpayer, or seller, to defer the capital gains tax and depreciation recapture on the transaction. The property sold as part of a 1031 exchange is the Relinquished Property. The property purchased is the Replacement Property. The real property in a 1031 exchange must be like-kind; most real estate is like-kind to all other real estate. For example, an office building could be exchanged for a rental duplex, a retail shopping center could be exchanged for farmland, etc. During a 1031 exchange, neither the taxpayer nor an agent of the taxpayer can receive or control the funds from the sale of the property. If a taxpayer has direct or indirect access to the funds, a 1031 exchange is no longer valid. A qualified intermediary is used to hold the proceeds of the Relinquished Property sale until it is time to transfer those proceeds for the close of the Replacement property. To be eligible for a 1031 exchange the person or entity must be a US taxpaying identity. This includes individuals, partnerships, S-corporations, C-corporations, LLCs, and trusts. However, it is a requirement that the same taxpayer sells the relinquished property and purchases the replacement property for a valid exchange. 1031 exchanges were first authorized in 1921 because Congress saw the importance of people reinvesting in business assets and they wanted to encourage more of it. There have been changes and additions to the regulations that govern 1031 exchanges, and the most recent changes impacting real estate in a 1031 exchange were in 2001. The Complete Playbook

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