Capital gains are defined as profits from an increase in value of an asset, like real estate, stocks or that vintage wine collection you’ve been building. Now, here’s the crucial part: You only pay taxes on these gains when you realize them or when you sell the asset. Those gains are just paper profits floating in the ether until then. Specifically for the people who are wealthy, this distinction is especially important.
We at Dominion know that to preserve and grow your wealth, you need to know the tax implications of your financial decisions. We’ve earned our chops by being the absolute experts in the field of wealth management and tax optimization as it pertains to people like you. This is your guide to capital gains tax in the Sunshine State.
Understanding Capital Gains Tax
Time is a big factor when it comes to capital gains tax. Any profit from an asset you sell within one year of holding it is a short-term capital gain. If you hold it for more than a year, you’re talking about long-term capital gains. Why does this matter? They are treated differently by the tax man.
Dominion serves ultra-high-net-worth individuals, and in 2024, federal capital gains taxes on long-term gains can be as high as 20%. That’s a lot of your hard-earned profit.
And while short-term gains are taxed at your ordinary income tax rate (which could be as high as 37%), there’s a silver lining for Florida residents: The Sunshine State doesn’t have a state capital gains tax.
Now let us look at an example. A few years ago, imagine you bought a prime piece of Miami beachfront property for $5 million. But now, with the market booming you want to sell it for $12 million. That’s $7 million in profit.
At the federal level, you’d be subject to that 20% long-term capital gains tax on a portion of that gain. But, because of Florida’s favorable tax environment, you won’t be paying any additional state taxes on that windfall.
Why Capital Gains Tax Planning Matters for You
Capital gains tax can feel like a hefty toll on your financial success for those who are used to dealing with substantial figures. But it doesn’t have to be. High-net-worth individuals who want to not only maintain but increase their wealth need proactive tax planning. It’s a strategic game where you make informed decisions today to protect your financial future.
It’s not merely a matter of keeping more money in your pocket now but about maximizing your investment capital for future growth. When you save a dollar in taxes, that’s a dollar you can reinvest that’ll make additional returns, compounding your wealth over time.
If you don’t have a good strategy for taxes, you are running the risk of eroding your wealth, blocking the ability to expand your portfolio or possibly even endangering the legacy you want to leave. We at Dominion believe that your wealth should work for you, not the taxman.
Advanced Tax Planning Strategies for High-Net-Worth Floridians
If you have amassed a great deal of wealth, basic strategies are not enough to minimize tax liabilities. You require sophisticated solutions that are specific to your situation. Advanced planning techniques to preserve and grow your assets is our expertise at Dominion, where we also know how to walk you through the intricately designed tax laws and regulations.
Charitable Remainder Trust
The Charitable Remainder Trust (CRT) is one powerful tool in your arsenal. Under this arrangement, you can donate appreciated assets to a trust, collect an income stream for yourself or your beneficiary, and pay no gift taxes. This allows you to defer paying capital gains tax, to deduct this gift as a charitable income tax deduction, and perhaps even reduce your estate tax burden. It’s a win-win. But you do both by supporting causes that you care about and optimizing your tax situation.
Family Limited Partnerships
Family Limited Partnerships (FLPs) are a great way to pass wealth down through generations. An FLP is a way to transfer assets to family members without gift and estate taxes by retaining control of the assets. But besides facilitating wealth transfer, this strategy allows protection of assets and helps keep the family together – together with a common focus on their financial goals.
Of course, how you invest is important in managing capital gains tax. It’s much better to focus on long-term investments than short-term trades which will also lower your tax burden. Why? The reason being, long-term capital gains are taxed at a lower rate than short-term gains. We can help you build a diversified portfolio that will help you reach your financial goals while minimizing your tax exposure.
Qualified Opportunity Zones
Finally, you can explore Qualified Opportunity Zones (QOZs). These areas are designated as they supply investors with several tax benefits if the capital gained is reinvested into real estate or business in these zones. QOZs offer an opportunity to defer, reduce, and even eliminate capital gains taxes, and as such are quite attractive for investors trying to maximize their post-tax returns.
In Florida, high net worth individuals can take advantage of these and other advanced tax planning strategies. But at Dominion, we believe your wealth management should be holistic, and tax plays a part in that. If you’re ready to explore how best to achieve financial security, we’ll create a plan customized to your needs that fits with your financial goals.
Dominion’s Comprehensive Approach to Wealth Governance
On their own, Charitable Remainder Trusts or Family Limited Partnerships are powerful, powerful tools, but pieces of a larger piece. We provide comprehensive wealth governance. And we take an integrated approach to your financial life for tailored solutions.
In other words, we don’t just help you reduce your tax burden, we protect your assets, maximize your investments, and plan for the future. We’re comprised of a team of experienced experts, from tax attorneys to asset protection specialists and investment managers. We work together seamlessly to create a plan that is customized to your needs and goals.
Most importantly, we stay objective and adaptable. The laws and regulations that govern wealth are always changing, and so is the world. That’s why we stay ahead of the curve, rolling with the punches so you can feel confident that we continue to protect your wealth from the unexpected and the unknown. You could say objectivity and adaptability have always set Dominion apart. We believe in an integrated approach that considers every facet of your financial life.
Asset Protection: The Foundation of Wealth Governance
True wealth governance starts with an impenetrable defense, and that’s what we know at Dominion. Your assets are the building blocks of your legacy and you just cannot afford to be careless when it comes to protecting them. We take a different approach to asset protection – some might even say it’s a revelation. We’ve built a global network of experts who know the ins and outs of international law and the shifting sands of financial regulation. More than advisors, we’re guardians, protecting your wealth from frivolous lawsuits, a volatile market, or even political instability. This uncompromising dedication to asset protection is the foundation which allows us to construct complete wealth governance strategies.
The Dominion Difference: Why Choose Us?
Effective wealth governance goes far beyond minimizing your tax liability. Basically, it comes down to achieving peace of mind and ensuring that your financial legacy is in line with your values. Working with Dominion equals more than tax savings, as we provide you with the confidence that your wealth is structured to withstand any storm.
Because as we well know, in the world of wealth management, experience and expertise are paramount. Dominion’s team comprises seasoned professionals with a deep understanding of the unique challenges and opportunities that confront high-net-worth individuals.
We’ve earned a reputation for our unwavering commitment to client success, our ability to adapt to evolving circumstances, and our strict adherence to the highest ethical standards. When you choose Dominion, you’re choosing a partner dedicated to helping you achieve your financial aspirations. We believe in building long-term relationships based on trust, transparency, and mutual respect. Presenting you with unmatched care and attention ensures you have a trusted ally keeping your wealth safe and secure.
Dominion Is Your Asset Protector – Contact Us Today to Secure Your Wealth
Capital gains tax is a topic that can have a big impact on your wealth accumulation and legacy in the world of high finance. Proactive planning is not an option for high-net-worth individuals in Florida, it is a necessity. You don’t want to see a substantial chunk of your hard-earned gains slip away unnecessarily.
Wealth management is a journey, not a destination, at Dominion. We’re here to help you every step of the way so your financial goals stay within reach. Personalized consultations are available through contact with Dominion today. Our team of experts will show you how we can help you secure your wealth for generations to come.
.jpeg)
