Making the decision to sell your business can be stressful as you try to choose the best options that will benefit you the most. When choosing to sell your business to an unrelated third-party, one option you should consider is an “Incomplete-Gift Non-Grantor trust,” or ING trust. If you are considering an ING trust but are unsure if it is the best choice for your needs, it is important you understand the many benefits that can come in regards to your income tax.
Cardon Law is a Utah business law firm with extensive experience helping clients navigate the legal decisions necessary to protect their interests when selling a business. We understand the rules and regulations concerning business law can become convoluted, which is why our team of legal professionals provides dedicated legal counsel to help you make the smartest decision that will benefit you the most.
Should You Utilize an ING Trust For Income Tax Benefits When Selling a Business?
Making the right choices when selling your business can make all the difference when it comes to how much money you are able to walk away with at the end of the day. One popular option for business owners looking to sell their businesses is the ING trust. The Incomplete-Gift Non-Grantor trust has several income tax benefits that may be attractive to those trying to sell a business. Those benefits are as follows:
- State income tax savings for grantors: For grantors living in high-income tax states, this trust can be beneficial. In most cases, the grantor can transfer appreciated assets with a low basis into the trust. Due to the fact that the ING trust is established in a low or no-income-tax state, the eventual sale of these assets is subject to minimal to no state income tax upon completion of the deal.
- Savings in states that do not recognize the federal grantor trust rules: In this case, the Incomplete-Gift Non-Grantor trust allows the undistributed income and gains to remain untaxed by the resident state of the trust.
- Avoid federal gift tax consequences: The grantor has the ability to transfer their assets into an ING trust, retain access to the cash-flow, and avoid making a completed gift for federal gift tax consequences. This benefit is especially appealing to individuals who have already fully utilized their lifetime gift tax exemption.
If you are unsure if an ING trust is the best option for the sale of your Utah business, consult a trusted business lawyer as soon as possible to decide how you should move forward to best protect your interests.
Contact a Pleasant Grove Business Lawyer Today
The process of selling your business can be overwhelming as you weigh what options you have to ensure you are financially protected. The income tax benefits that come with an ING trust can be very attractive to a business owner who is moving to sell. If you are interested in how an ING trust can benefit you in the sale of your business, speak with Attorney Jeffrey Cardon.
At Cardon Law, you will have access to the resources and advice from an experienced and dependable legal representative. Jeffrey Cardon is an entrepreneur with over 15 years of experience representing business owners, investors, and executives. You can count on our legal team to represent you and your company.