Saving for Retirement: Definitive Guide

Saving for Retirement: Definitive Guide

By Donny Gamble

One of the questions that we get asked most frequently is when is the best time to start saving for retirement. We always give the same answer - it's never too early to start saving for retirement, but it is also never too late to start doing so.  When is the right time to start saving for your retirement? Right now!

Saving for the future is one of the most difficult things to do. Our brains are wired to worry about what is in front of us rather than planning for the future. This is a skill we developed during our cavemen days and haven't managed to shake off yet.

Putting money aside that you are not going to use for 20+ years is a difficult task for anyone, especially if you could make use of it now. This is something that even financial experts struggle to do (and we should know better).

If you have put off setting up your finances so that you can save for retirement, don't feel too guilty. You're not alone, around 48% of Americans don't have a retirement bank account.

But don't worry too much, you have made the first step. You have started looking for help and you have come to the right place.

In the guide, we will talk you through the 7 most important stages of saving for retirement and life after work.

When Can You Retire?

The Importance of Saving For Retirement

7 Essential Steps to Getting Started

Summary

When Can You Retire?

To continue reading, please go to the original article here:

https://retirementinvestments.com/how-to-save-for-retirement/

17 Formerly Poor People Who Suddenly Became Rich Sharing What Shocked Them Most About Transition

17 Formerly Poor People Who Suddenly Became Rich Are Sharing What Shocked Them Most About The Transition

Thu, December 30, 2021,

Coming into large sums of money all of a sudden can be a jarring experience for anyone, especially when struggling financially is all you've ever known. So we asked the BuzzFeed Community to share what surprised them most about the sudden shift from being poor to rich and how their lifestyles changed because of it.

Here's what they shared:

1."The biggest 'luxury' I've found myself indulging in after finding financial stability is medical care. I used to hesitate to go to the doctor for anything, but now I make appointments without hesitation. It sounds so silly, but I love being able to afford to get my foot pain taken care of, along with my acne and emotional trauma."

"Not only were the appointments at one point unaffordable, but so were many of the prescribed treatments. It makes me so sad that I didn't take care of myself for so long because of financial strain, but I love my regular appointments with my podiatrist, dermatologist, and therapist."   —Anonymous

2."Suddenly coming into money changed everything. The first thing I did was FINALLY go to the dentist and get my teeth taken care of. I had tried to ignore them for a long time because we never had enough money. In the past, if it was a choice of paying the electric or getting my cavities filled, I always chose to pay bills."  —Anonymous

3."When I was poor, doctors looked down on me and treated me like I was drug-seeking. Since I've become successful, I've been properly diagnosed with several conditions that had lingered for years. It's also wonderful being able to not worry about the cost of glasses or if the dentist recommends work."

"I still remember how one woman at the optometrist sneered at me when I asked if there were any other glasses options besides the huge Coke bottle glasses offered to kids on welfare. Now I can get whatever glasses I want, and everyone is always quick to help me."   —Anonymous

4."Most recently, I got a new job that pays almost double what I was making. When I told a friend how much they offered, I broke down crying. She asked me why, and I told her, 'I can finally afford food!' To me, I feel rich because even though I have health insurance, I can pay my rent, car payment, car insurance, and phone; the one thing that always took a hit was food."

"During the pandemic lockdown, friends of mine that had food stamps would buy me food because even though one of my jobs laid me off, I didn't qualify for unemployment since I still had a second job. I used to make excuses to not have a meal with friends because I knew I couldn't afford it, or I would say that I had eaten at home so I wasn't hungry. Now, I am able to take my friends out to a nice dinner and pay for us. It might not seem like the biggest deal in the world, but to me, it means everything."   —Anonymous

5."Middle-class background but my parents fell into debt in my early teenage years, and we struggled to meet ends meet ever since. I left Central/Eastern Europe for the UK to study at 18, became financially independent, and entered a highish-paying tech job at 21. It surprised me how much earning more than my parents at a young age caused me to have issues with our parent-child relationship."

"I couldn't stomach them paying for me at all, not even hosting dinner. I felt guilty and responsible. And they are the best parents ever, only proud of me and never expecting anything! I had to seek therapy, and it took me over a year to come to terms [with the fact that] I am not responsible for their choices and can live life at a different level than them. Never expected this psychological burden."   —Anonymous

To continue reading, please go to the original article here:

https://www.yahoo.com/lifestyle/people-struggled-financially-fell-money-044602876.html

5 Ways To Close Your Financial Knowledge Gap

5 Ways To Close Your Financial Knowledge Gap

Serah Louis   Sat, December 18, 2021, 10:01 AM·5 min read

60% of millennials and Gen Z are ‘constantly stressed’ about money — With Christmas around the corner and federal student loans switching on next month, money stress is reaching a peak for many young people — and it’s been bad for a while.

Nearly three in four Americans under 40 say managing their finances is taking a toll on their mental health, according to a new survey from Laurel Road, KeyBank’s digital banking platform. Over 60% feel “constantly stressed.”

“Financial stress and anxiety are incredibly common feelings among Gen Z and millennials,” says Alyssa Schaefer, general manager and chief experience officer at Laurel Road. “We see that cultivating ‘mental wealth’ is clearly a priority for many individuals.”

That means building more financial knowledge and setting up a financial plan so you can feel confident about the future. Here are five ways to achieve those goals:

1. Beat your debt into shape

While you may not be able to eliminate your student debt or credit card debt anytime soon, you can relieve a lot of pressure by getting them in the most manageable shape possible.

If you have a federal student loan, the government offers income-driven repayment plans that allow borrowers to make more affordable payments, based on what they earn. After you make 20 or 25 years of regular payments under an income-driven plan, your remaining debt will be forgiven.

Another simple money-saving step is to enroll in autopay, because signing up for automatic deposits will qualify you for a 0.25% interest rate reduction when payments resume.

On the other hand, if you have a private loan, your best bet could be refinancing with one of today’s cheap interest rates. Assuming you have a decent credit score, refinancing could help you pay off your loan more quickly and save you a huge amount in interest.

The same strategy can work for any high-interest debt you’re carrying, like the kind on credit cards. Refinancing to a lower rate could see you free yourself years sooner.

2. Create an actual budget

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/millennials-gen-z-suffering-mental-162500676.html

The Top Ways That US Millionaires Make Their Money

The Top Ways That US Millionaires Make Their Money

Andrew Lisa   Thu, December 16, 2021

Nearly 22 million Americans have net worth's of at least $1 million, according to the 2021 Credit Suisse Global Wealth Report — more than 8% of the country’s adults. There are 820,000 millionaires living in New York City alone.

Each and every one of them has a different story about how they got there, but many of America’s millionaires share similar traits, skills, behaviors, philosophies and fields. All are either self-made or they were born into it, and most of those who earned their big bucks took one of four broad, general paths to get there. From there, 10 industries stand out above all the rest as assembly lines for the ultra-rich — but no matter the industry, most millionaires are joined together by a few common unifiers.

To help illuminate a path toward a seven-figure net worth, GOBankingRates used a variety of sources to examine the industries, backgrounds, tendencies and income sources that are common to America’s millions of millionaires.

If You Don’t Win the Birth Lottery, You’ll Have To Earn It Yourself

Every millionaire in America falls into one of two categories: those who are self-made and those who became rich through that oh-so-important original roll of the dice when they were born into money. The latter, of course, is the easier of the two options — but it’s not the most common.

According to the 2021 Wealth-X World Ultra Wealth Report, the vast majority of ultra-high net worth (UHNW) individuals — those worth at least $30 million — are self-made, 72%, to be exact. Granted, that percentage is for the entire world, not just the United States, but America is the land of UHNW individuals.

And of these individuals, 101,240 of them live in the United States. The next closest competitor, China, is home to fewer than 30,000 despite the country’s enormous population advantage. The U.S. hosts three of the world’s top five UHNW cities (New York, Los Angeles and Chicago) and six of the top 10 (add on San Francisco, Washington, D.C. and Dallas).

The Four Paths to Seven Figures

In writing for CNBC, financial expert and author Tim Corley outlined the results of research he conducted for one of his books. The results revealed that people tend to follow one of four paths to becoming millionaires.

To continue reading, please go to the original article here:

https://news.yahoo.com/top-ways-us-millionaires-money-130019299.html

How To Ensure You’re Not a Financial Burden in Your Later Years & Beyond

How To Ensure You’re Not a Financial Burden in Your Later Years & Beyond

Gabrielle Olya   Wed, December 15,  2021

For many Americans, the pandemic has brought to light the importance of legacy planning. A recent study conducted by financial services firm Edward Jones found that a third of U.S. adults report that the pandemic sparked conversations with close family members about their end-of-life plans and preferences, and for 18% of Americans, these were first-time discussions.

Although these conversations can be uncomfortable — 18% reported being too uncomfortable to discuss these topics — they’re important to have so that you and your loved ones are on the same page about your plans for your later years and beyond.

A fifth of those surveyed said they have avoided talking about end-of-life plans because they did not want to burden family members with their finances, but it’s not having these conversations that could cause your family members to deal with a large financial burden in the end.

Here’s what should be included in your plans for your later years and end-of-life to ensure your loved ones are financially prepared.

Create an Estate Plan

“There are many different factors to consider when developing an estate plan that best fits your unique needs,” said Alison Carnie, CFP, principal at Edward Jones. “First, work with your financial advisor to make a list of all of your assets including investment and retirement accounts (IRAs, 401(k) [plans], brokerage accounts); cash or checking/savings accounts; real estate; personal property (automobiles, boats, jewelry, artwork); insurance policies and annuity contracts.”

Next, determine what your priorities are. When it comes to the kind of legacy people want to leave to their families, nearly a third (32%) said leaving an inheritance is the most important thing.

One of the easiest ways to make sure your assets go to the people you intend is to list them as beneficiaries,” Carnie said. “Ensure that the correct beneficiaries are named on your accounts and that these designations are consistent with your overall estate plan. Brokerage accounts don’t automatically include beneficiary designations, but you can complete a Transfer on Death agreement to identify the person to whom the assets should go.”

You should review your beneficiaries any time something major happens in your life, such as when you marry, divorce or have a child, Carnie said.

To continue reading, please go to the original article here:

https://news.yahoo.com/ensure-not-financial-burden-later-210016052.html

6 Things the Rich Do To Stay Rich

6 Things the Rich Do To Stay Rich

Jennifer Taylor   Wed, December 15, 2021,

If you’re trying to make more money, studying the rich is a great place to start. Some wealthy people were born into money, while others worked their way to the top. However they got there, many have figured out how to stay rich.  Learning how to make millions is one thing, but mastering the art of keeping that fortune intact is a different task. Many people get rich, only to blow through their earnings in a matter of years.

Whether you have come into money or are still figuring out how to get rich, keep reading to learn more about how the rich stay rich.

1. They Avoid Get-Rich-Quick Schemes

One common misconception is that the wealthy constantly look to get richer more quickly through engaging in activities such as picking stocks, said Laurie Samay, who previously served as a certified financial planner and client service and portfolio manager at Palisades Hudson Financial Group. “In reality, the wealthy are typically more interested in preserving their wealth,” she said.

Rather than taking a risk on volatile get-rich-quick schemes, Samay said the wealthy take a slow-and-steady approach to investing, and they focus on diversification. She recommended investing across several asset classes to gradually build wealth.

 “Many academic studies have concluded that the mix of stocks and bonds in a portfolio has the greatest influence on performance — even more so than transaction costs and security selection,” Samay said. “Like the rich, your portfolio should be adequately diversified across asset classes.”

Samay said being diversified might include exposure to:

To continue reading, please go to the original article here:

https://news.yahoo.com/6-things-rich-stay-rich-212241922.html

How Will A Strengthening Dollar Affect Emerging Markets?

How Will A Strengthening Dollar Affect Emerging Markets?

Posted by Robin Powell on December 9, 2021

The US dollar has been strengthening, and commentators are predicting that it will strengthen further. The Federal Reserve is expected to raise interest rates, and higher rates are generally seen as a boon to the greenback, because they increase its attractiveness against other currencies.

Another big factor is the long-awaited tapering of the Fed’s quantitative easing programme. So what will tapering mean for emerging stock markets? BENEDEK VÖRÖS from S&P Dow Jones Indices has been looking at what happened when then-Fed Chairman Ben Bernanke revealed plans to taper QE in 2013, and what, if anything, that tells us about the likely impact on emerging markets this time.

“The dollar is our currency, but it’s your problem.”  — former U.S. Treasury Secretary John Connally

 When John Connally uttered the famous words above 50 years ago at a meeting of major finance ministers in Rome, it was just three months after the U.S. had unilaterally dismantled the post-World War II global monetary system known as Bretton Woods. The “problem” Connally referred to was a rapidly depreciating U.S. dollar, which threatened the competitiveness of exporters based in the U.S.’s main trading partners.

In the decades since, however, developing countries have faced the opposite challenge. Time and again, a bout of U.S. dollar strengthening has triggered turmoil in emerging economies that predominantly borrow abroad in foreign currencies, usually U.S. dollars. Thus, a strengthening U.S. dollar has increased emerging markets’ debt burden, depressing consumption and economic growth, and consequently leading to dismal domestic equity market returns.

The last such instance was triggered in May 2013, when then-Federal Reserve Chairman Ben Bernanke revealed plans to wind down the Fed’s gargantuan quantitative easing program, setting off a so-called “taper tantrum”: bond yields surged around the world, ex-U.S. stock prices tumbled, and a soaring greenback put severe strain on emerging market economies worldwide.

To continue reading, please go to the original article here:

https://www.evidenceinvestor.com/how-will-a-strengthening-dollar-affect-emerging-markets/

So, You Want To Be a Millionaire? 7 Ways To Set Yourself Up for Success

So, You Want To Be a Millionaire? 7 Ways To Set Yourself Up for Success

Jordan Rosenfeld   Mon, December 13, 2021,

Becoming a millionaire may seem like the zenith of success for most people, particularly if you’ve worked for minimum wage or struggled to get a raise. And while earning a million dollars today is more feasible in some ways than it was even 30 or 40 years ago, aside from luck and winning the lottery, it takes strategic planning. Experts weigh in on seven ways to set yourself to become a millionaire.

Invest a Lot, and Early

Perhaps the most tried and true method to earn a million dollars is to start investing as much of your income as you can, as early as you can, said Scott Alan Turner, a certified financial planner and consumer advocate with Rockstar Financial Planning.

“The math behind becoming a millionaire is quite simple. Step one: smartly invest around $430 a month. Step two: repeat every month for 30 months.”

If this seems like a lot of money to put away, Turner points out that most people pay this much on a car payment each month. “Cars are wealth killers,” he said. The hard part is staying disciplined, he added. “It’s really hard to get rick quick. For earlier financial independence, many people save and invest more.”

The Later You Start, the More You Need To Invest

If you’re starting later in life, the amount you have to invest each month climbs, said Daniel Demian, financial advice expert at Albert. “Starting at age 20, you should aim to invest $364 per month toward retirement to hit a million dollars in savings by age 65,” he said. By age 40 that number has to increase to $1,444. By age 50, $3,439 per month.

Consider Index Funds

Not all investments are created equal. Lattice Hudson, a leadership mentor, business coach and founder of Lattice & Co., advises that you consider index funds. “It’s a large collection of stocks meant to monitor the overall market,” he said. “This is advantageous because you are not investing all of your money in a single company; instead you begin by acquiring a small portion of a couple companies with very low fees.” These funds consistently outperform more expensive competitors, he added.

Invest In Assets That Gain Value

To continue reading, please go to the original article here:

https://news.yahoo.com/want-millionaire-7-ways-set-041353180.html

Some Common Sense Advice From Two Billionaires

Some Common Sense Advice From Two Billionaires

Notes From The Field By Simon Black  December 13, 2021

Elon Musk didn’t have a care in the world last week as he hilariously mocked questions in a live interview with the Wall Street Journal.

The Journal’s reporter had essentially prepared a number of softball questions designed for Elon to praise the US government’s new ‘Build Back Better’ bill.

If you haven’t heard, the legislation contains a number of provisions which should greatly benefit Tesla, including major subsidies to build electric vehicle charging stations across the US.

But Elon had no interest in the puff piece.

“Unnecessary,” he interjected when the reporter started to ask what he thought of the subsidies.

“Do we need support for gas stations? We don’t. So there’s no need for support for a charging network. I’d delete it. Delete.”

This left the reporter flummoxed... how could Elon possibly not be excited about “free” government money that would support his business?

But Elon’s point seemed completely lost on her.

“Seriously we shouldn’t pass it,” Elon continued, almost exasperated.

“If we don’t cut government spending, something really bad is going to happen. This is crazy. Our spending is so far in excess of revenue its insane. You could zero out all billionaires in the country... you still wouldn’t solve the deficit.”

So the reporter said, well, let’s change the subject.

Elon then sounded-off on issues like the rise of China and corresponding decline of the US. He also called declining birth rates “one of the biggest risks to civilization.”

Now, Elon Musk is a famously eccentric character.

But another more ‘traditional’ billionaire is also on board with this ethos.

Ray Dalio founded and runs the largest hedge fund in the world, Bridgewater Associates.

He has been very vocal over the past several years about the pathetic state of US government finances, and obvious shift of wealth and power away from the US.

For example, last year he published an article which asks, why in the world would you own bonds?

Dalio points out that, buying US Treasury bonds (which is tantamount to loaning money to the federal government) USED TO BE a good investment, back when America was actually creditworthy.

But now when you buy bonds, you’re loaning money to the largest debtor that has ever existed in the history of the world... and in exchange you are receiving return that is well below the rate of inflation. 

Dalio points out that people still value US government bonds because of “the ‘exorbitant privilege’ the US has had being the world’s leading reserve currency, which has allowed the US to overborrow for decades.”

But there are signs of the changing global wealth and power dynamic, as international investors are starting to shift to Chinese bonds.

That’s a major theme in Dalio’s new book, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail.

Dalio has made it his life’s work to understand debt and political cycles, in order to foresee risks that others miss, and better serve his clients.

He makes a lot of the same assertions that Elon makes; for example, Dalio explains that economies, governments, and civilizations move in cycles. And in simple terms, there are good parts of the cycle, and there are bad parts.

The good part of the cycle is characterized by peace, prosperity, and production. The bad part includes recession, depression, inflation, social conflict, and war.

If you think about US history, we can see that the 1920s were a ‘good’ part of the cycle. The 1930s and 1940s were bad— the Great Depression, World War II, etc.

Then the 1950s and early 1960s were good again. The late 1960s through the early 1980s were bad, marked by extreme social turmoil, geopolitical conflict, and stagflation.

The mid 1990s through the mid 2010s were generally quite good, especially from an economic perspective.

Now we seem to be in transition once again to a bad part of the cycle— social conflict, inflation, geopolitical tensions, and more.

Dalio’s book, which I highly recommend reading, lays out a very clear case of what is happening right now, and why.

His ideas are quite similar to much of what we have been writing about for so long here at Sovereign Man.

And Dalio has suggested some of the same solutions that we’ve discussed in these pages.

First, education is critical: it’s imperative to understand how these cycles work in order to be prepared for what’s coming.

Mindset is also key: There’s no reason to panic. The world is not coming to an end. But it IS changing. Rapidly.

Dalio writes that the transition from the good part of the cycle to the bad part are rarely smooth or peaceful. And they often coincide with a shift of wealth and power.

And the United States, while still strong, is clearly losing its wealth and power thanks to its historical debt, massive deficits, an utter embarrassment in Afghanistan, the rise of Marxism, ridiculous ‘woke’ national priorities, etc.

For these reasons, it makes sense to take rational steps to mitigate these long-term risks.

Investors frequently diversify their portfolios to reduce risk; they spread their assets around different companies, different sectors, and even different asset classes, in order to ensure that they’re not over-exposed to a single set of risks.

Similarly, our approach at Sovereign Man is to diversify your geographic/country risk as well.

Give serious thought to the long-term risks where you live. Will your home country experience social conflict, inflation, capital controls, or war?

The good news is that not all countries are going through the same part of their cycles. By taking a global view, you can avoid the worst of the economic shifts that Elon Musk and Ray Dalio are talking about... and what we’ve been writing about for years at Sovereign Man.

This could mean securing foreign citizenship or residency, to ensure you always have another place to go, just in case you ever need the option.

It could mean using alternative assets like crypto or precious metals as a hedge against inflation. Or investing internationally to reduce exposure to your home currency.

The key idea is— don’t put all of your eggs in one basket... especially when that basket is the largest debtor in world history that’s blindly racing as fast as it can into a fiscal abyss.

To your freedom,  Simon Black, Founder, SovereignMan.com

https://www.sovereignman.com/trends/some-common-sense-advice-from-two-billionaires-34097/

Some Possible Questions to Ask at Your Exchange : Posted by Red at TNT

TNT:

Red:  Dinar- Questions For Private Banker/Wealth Manager/Brokerage General Manager, Source Internet, authors unknown.

No suggestions being made. I post only what I am doing.

 NOTICE, this conversation is being recorded for training or other use. If this is acceptable to you, please say YES.

I want to request your permission to ask a few questions as our interview progresses. Okay?  Yes

Your full name. ____________________    Your best contact phone number._______________________

I am Asking about all the professional licenses you hold? Abbreviations.___________________________

I hope you do not feel these questions are too personal or suggestive. I want to make sure my best interest will be put in first place in every transaction we do together.

1.       I want a mutual understanding we are both in this investment portfolio as a team so that we may both be richly and adequately compensated. Teamwork, Is this goal acceptable to you?

2.       How long have you been employed in mega client account level banking?

3.       How many clients are you currently serving?

4.       How many of those are in the 60 million dollar and up segment?

5.       What other services do you provide to me as a megabank investment client?

6.       Are you able to give me precise custom advice on individual investments?

7.       At this time, as my banker/wealth manager. Do you represent a team? How many members?

8.       How often does this team meet to discuss my exclusive current investment portfolio?

9.       May I ask how many years you have been married to your current spouse?

10.   How many children do you have? How many with your current spouse, if applicable?

11.   I understand that you are exclusively employed with this bank. Is this correct?

12.   Is any part of your income derived from commissions or fees from my investment relationship?

13.   Do you have a written client relationship document for me to review and hold?

14.   How long have you lived in the nearby vicinity of this bank facility?

15.   As my advisor, are you working solely in my interest as a fiduciary?

16.   I want all my accounts to be 100% private between my fiduciary agent and myself. Will you make sure this is the case? IE No testing, training, marketing, or other staff or employees have access.

17.   Thus far, do you believe you and your financial institution can strike a mutually agreeable investment relationship on my behalf?  

18.   Do you feel comfortable with being my leading team player?

19.   I want to receive copies of all the necessary insurances you carry on my behalf, like E&O.

20.   I want to review your ADV form registered with the securities and exchange commission and state security Authority. May I have copies of those for my review before entering into our investment agreement?

21.   I would like to have a printout on how much the principals of this institution have invested with this institution.

22.   I want to request a printout of the percentage of your investment held in this institution.

23.   Now that we are ready to discuss investing my funds, the interest to be paid, and the term of this investment contract, is there anything I should have asked you to present or reveal that I have overlooked? Is there anything I need to know that we haven't covered?

24.   To start the investment, I want to be included in our agreement never to have a fee, or a charge of any kind applied to my banking or investments with this institution, agreed? 

Note:   Not all information may apply to you and your personal situation…..Take what you like and leave the rest:  Some you may want to save for your own personal records!

How to Avoid the Gift Tax

How to Avoid the Gift Tax

Eric Reed   Thu, December 9, 2021,

The gift tax is a tax levied on any unilateral transfer (a gift) from one person to another. This applies to any kind of taxable assets, including cash, securities and real estate. When the gift tax applies, it is the donor who pays, meaning that if you give a taxable gift you owe any applicable taxes. If you receive a gift, it is rare, if ever, that you owe taxes. It is exceedingly rare for someone to owe money due to the gift tax.

This tends to apply only to the wealthiest of households due to the tax’s high exclusions. This is because the purpose of the gift tax is to prevent wealthy families from avoiding the estate tax by simply gifting all their money to each new set of heirs. Here’s what you need to know.

Consider working with a financial advisor as you seek ways to transfer wealth to family members or loved ones.

What Is the Gift Tax?

Per the IRS, this is a tax levied on “[a]ny transfer to an individual, either directly or indirectly, where full consideration (measured in money or money’s worth) is not received in return.” If you give something of value and get less than it is worth in return, it is considered a gift and may be taxable under this law.

Importantly, this applies if you give something of value and get a nominal amount in return. (In law this is called a “de minimis” transaction.) For example, say you want to give your children the family house. Instead of giving it outright you sell it to them for $100. You do this because ordinarily a property sale doesn’t trigger the gift tax. From a legal standpoint the parties have exchanged assets so the only relevant tax would be on any capital gains.

However, in this case the sale price had no bearing on the fair market value of the property (otherwise known as “full consideration”). As a result you would owe taxes on the difference between the house’s sale price ($100) and its fair market value. Structuring this sale specifically to avoid the gift tax would be a form of felony tax fraud.

This is a particularly common type of tax evasion among family businesses and within closely held real estate companies.

To continue reading, please go to the original article here:

https://news.yahoo.com/avoid-gift-tax-210048131.html