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Deducting your business equipment twice and acheiving asset protection

Sandy Botkin
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How would you like to double deduct your equipment and protect them from judgements? Sounds too good to be true, doesn’t it? Well you can, and it isn’t that hard to accomplsih. This is far and away one of the top financial planning strategies in the country, especially for physicians.

You start by giving away property that you are using in business but has been mostly depreciated either to a relative directly or to an irrevocable trust. You would then lease it back from them in trust and pay monthly lease payments. . Since you have already depreciated the equipment, these lease payments made to family members result in a double deduction for the equipment. Moreover, if you are sued thereafter, you have no business assets in your name and thus, have liability-proofed your assets. This well-known strategy of the rich is called the “Gift-Leaseback” technique.

Example: You have some equipment in your rental property comprising furniture, refrigerators, stoves, ovens, microwaves etc. You depreciate this equipment over 7 years. Once depreciated, you would set up a trust and transfer the title to the equipment to the trust,where your kids or grand kids are the beneficiaries and then lease the equipment back from the trust. It is that easy. You will need a trust and a leasing agreement, thus, you might want to use a good lawyer for this. Pretty neat, huh?

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Sandy Botkin

Sandy is a CPA, Tax Attorney, and former IRS trainer. He has authored many helpful books on the subject of taxes, including 7 Simple Ways to Legally Avoid Paying Taxes ( Click Here ), Lower Your Taxes: Big Time ( Click Here ), and Real Estate Tax Secrets of the Rich ( Click Here ).

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