Practice Areas

DOMESTIC AND INTERNATIONAL TAX PLANNING

At PKDB, our Domestic Income Tax Planning practice area stands as a pillar of strategic support for individuals and businesses navigating the complexities of U.S. tax law. With a dedicated team of experienced tax attorneys, we offer comprehensive income tax planning services designed to minimize liabilities and optimize financial outcomes. We specialize in creating personalized tax planning solutions that reflect the unique financial landscapes of our clients, ensuring they take full advantage of the available tax-saving opportunities while remaining compliant with the ever-evolving tax regulations. Whether you're an individual seeking to manage your tax burden or a business owner looking for efficient tax structuring, PKDB provides the expertise and guidance necessary to navigate the challenges and opportunities presented by domestic income tax.

A key component of our practice is advising on Section 1031 exchanges, a powerful tool for deferring capital gains taxes on the exchange of certain types of property. Our attorneys have deep knowledge of the requirements and timelines associated with successfully executing a 1031 exchange, enabling our clients to reinvest proceeds from real estate or other qualifying assets without immediate tax consequences. This strategy can be particularly beneficial for investors looking to reallocate resources or diversify portfolios while deferring taxes that would otherwise diminish their investment capital. At PKDB, we guide our clients through the 1031 exchange process, from identifying qualifying properties to ensuring compliance with all legal requirements, maximizing the benefits of this tax deferral strategy.

In addition to 1031 exchanges, our firm is well-versed in a variety of deferral strategies and income tax planning techniques. We advise on retirement planning, charitable giving, and the utilization of trusts and other estate planning tools as means to reduce taxable income and defer tax liabilities. Our approach is holistic and forward-thinking, considering not only current tax implications but also future financial health and legacy planning. By keeping abreast of legislative changes and tax law developments, PKDB ensures that our clients' tax planning strategies are both effective in the present and adaptable to future changes. Trust our team to provide you with the insight and strategy needed to make informed tax decisions, reducing your burden while securing your financial future.

1031 Exchange: A 1031 exchange, named after Section 1031 of the U.S. Internal Revenue Code, allows investors to defer capital gains taxes on the exchange of certain types of property. By reinvesting the proceeds from the sale of investment property into another "like-kind" property, investors can defer taxes indefinitely, promoting investment growth and real estate portfolio diversification.

Capital Gain: Capital gain refers to the profit earned from the sale of an asset, such as real estate, stocks, or bonds, which exceeds the purchase price. Long-term capital gains, on assets held for more than a year, are typically taxed at lower rates than short-term gains, making them a focal point in investment and tax planning strategies.

Deferral Strategies: Deferral strategies are financial tactics employed to postpone or reduce tax liabilities to a later period, thereby potentially increasing investment growth. These strategies, including 1031 exchanges, retirement savings accounts, and certain insurance products, can help individuals and businesses manage cash flow and investment returns more effectively.

Depreciation: Depreciation is an accounting method that allocates the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence. For tax purposes, depreciation allows businesses to deduct the declining value of assets, thereby reducing taxable income.

Cost Segregation: Cost segregation is a tax strategy that identifies and reclassifies personal property assets to shorten the depreciation time for taxation purposes, leading to immediate tax savings. By accelerating depreciation, property owners can increase cash flow in the short term.

DST (Delaware Statutory Trust): A DST is a legal entity created as a trust under Delaware law that allows investors to hold fractional ownership in investment properties. DSTs qualify for 1031 exchanges, offering investors a way to defer capital gains taxes while providing a hands-off investment approach in real estate.

Preferred Partnership Freeze: A preferred partnership freeze is an estate planning technique where a business owner transfers assets into a partnership, retaining preferred interest for themselves. This can freeze the value of the owner's estate for tax purposes while passing future growth to the next generation or other beneficiaries.

Charitable Planning: Charitable planning involves integrating charitable giving into one's financial and estate planning. Strategies like establishing a charitable trust or donor-advised fund can provide significant tax benefits while supporting philanthropic goals.

Non-Profit Organizations: Non-profit organizations are entities that operate for purposes other than generating profit, such as charitable, religious, educational, or scientific endeavors. They enjoy tax-exempt status under IRS Section 501(c)(3), meaning they don't pay income tax on donations received or money earned through fundraising activities.

Compensation: Compensation encompasses all forms of payment or rewards received for employment or services rendered, including salaries, wages, bonuses, and benefits. Effective compensation planning is crucial for attracting, motivating, and retaining employees while managing tax implications for both the employer and employee.

Deferred Compensation: Deferred compensation is a portion of an employee's income that is paid out at a later date, providing a way to defer taxes on the income until it is received. This can be beneficial for both tax planning and retirement planning, as it may reduce current taxable income and provide income during retirement.