Florida's Affluent Reap Windfall: A Critical Look At The Tax Overhaul Benefits For High-Income ...

The Sunshine State's affluent residents are reaping the benefits of a new law, particularly those on the cusp of retirement. A prototypical Florida household, boasting a successful and asset-rich profile, stands to gain significantly from the recent tax overhaul. With a solid profit margin, this household can capitalize on a 20% deduction for pass-through income, now simplified.

On a $1. 2 million profit, this translates to $240,000 sheltered, resulting in over $90,000 in federal tax savings. The household can take advantage of expensing equipment purchases in full. For 2025, the limits stand at $1. 25 million, with a phase-out starting at $3. 13 million, and a 40% bonus depreciation. A $450,000 investment in trucks, for instance, yields immediate tax relief.

When it comes to sale planning... the household's business sale strategy will dictate their tax liability upon exit. Options include a stock sale, installment sale, or Charitable Remainder Trust (CRT). In addition, Delaware Statutory Trust (DST) offers an attractive alternative for property owners. By swapping a property into a 1031 DST, "they can gain fractional ownership in institutional real estate," "sans landlord duties.".. while defer ← →

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The content provided does not appear to be about a well-known person, but rather a hypothetical example of a Florida household and the impact of a new law on their financial situation. Background Document: The Tax Cuts and Jobs Act of 2017 introduced significant changes to the US tax code, affecting individuals and businesses alike.

One of the key provisions was the 20% deduction for pass-through income, which applies to entities such as partnerships, S corporations, and sole proprietorships. This deduction, also known as the Qualified Business Income (QBI) deduction, aims to reduce the tax burden on businesses and entrepreneurs. In 2025, the limits for expensing equipment purchases are set at $1. 25 million, with a phase-out starting at $3. 13 million.

Businesses can take advantage of 40% bonus depreciation... allowing them to deduct a significant portion of the cost of qualifying assets in the first year. The concept of a Delaware Statutory Trust (DST) has been around since the 1960s, "but it has gained popularity recently as a tool for real estate investors." A DST allows investors to exchange a property for fractional ownership in a trust... which holds institutional-grade real estate.

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Let's explore a prototypical Florida household – successful, asset-rich, and inching into retirement – and see how this law changes their playbook. They're solidly profitable. Comfortable. But the more you've earned, the more there is to optimize.