Re: HIDE CAPITAL GAINS

From: Jeff Salisbury <jeff.salisbury@xmission.com>
Subject: Re: HIDE CAPITAL GAINS
Date: Sat, 25 Dec 1999 22:40:31 -0700

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BOB FORD wrote:
> 
> I am not a tax pro but I don't think it is
> possible to hide any Capital Gains.
> It is my understanding that if you sell
> a capital asset at a profit, it must be
> reported on your income tax and
> there are no exceptions.  You must
> also report capital losses.
> 
> Someone let me know if that  is
> incorrect.
> 
> BOB FORD
> BOB_FORD@COMPUSERVE.COM
> 

Bob,

You are correct in that you can't "hide" any capital gains other than
the manner Rich explained.  

However, in my previous posting to your estate tax question, I talked
about a private annuity.  It turns out that this same private annuity
can be used to defer (not avoid) capital gains taxes.  The value of
defering these taxes are that you can in effect hang on to the cash that
you would otherwise be paying in taxes and benefit from the growth of
this cash.  If effect, you get to spread the payment of the taxes out
over many years -- you are getting a zero interest loan from Uncle Sam. 
Combine this with the favorable estate planning characteristics of the
Private Annuity and this can be a terrific planning tool under the
proper circumstances.

Jeff

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