There are two new articles in the Denha & Associates October 2012 Law Blog.
1. Year End is Almost Here—Are You Going To Use It Or Lose It?
This should motivate many to complete the estate and gift tax planning process before December 31, 2012. As reported throughout this year in previous blogs, time is running out to take advantage of a truly once-in-a-lifetime opportunity to make gifts to your loved ones, either outright or in trust. The reason to gift now is because of the many factors that play in favor of the taxpayer: record low interest rates, historically depressed real estate values, and favorable tax rates. This article hopes to provide a menu of strategies for you to consider in and during the planning process. Of course there are many other strategies, but the article outlines some of the more popular.
If Congress does not extend the “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010” (the Tax Relief Act), on January 1, 2013, the estate and gift tax exemptions will automatically be reduced to $1 million per person and $2 million per married couple, and the GST tax exemption will automatically be reduced to $1.4 million per person and $2.8 million per married couple. Even if Congress takes steps to change the law for 2013, the laws may not be as favorable as they are now.
The generous transfer tax benefits we have now will disappear in just a few months. If you have assets that you can afford to live without, we encourage you to consider making large gifts to your loved ones by December 31st. Read more here.
2. Buying Or Saving Real Estate Using A Bridge Loan
There is another option for real estate investors looking for quick financing: hard-money loans. Bridge loans—also known as swing loans, interim financing, or gap financing—and hard-money loans are used in the same context for purposes of this article. They describe short-term loans with higher than average interest rates. Hard-money lenders provide people with fast access to private money which is generally secured with other assets (generally real estate). In general terms, this method of financing can provide money to an investor regardless of job history, credit, or income provided an analysis concludes that the real estate securing the loan can be quickly flipped at a profit and used to repay the loan. Hard money loans are generally available for commercial properties, land, new construction, and even refinances on property. Read more here.
As Tennessee Williams once said, “You can be young without money, but you can’t be old without it.” That thought summarizes each of the above articles: Plan and enjoy what you have, but be careful in how you deal with it.
We hope these articles provide value to you. If you have any questions, concerns, or require legal assistance, please do not hesitate to contact us. (Randall A. Denha, Esq., Denha & Associates, PLLC | rad@denhalaw.com | 248-265-4100 (office) | www.denhalaw.com)
