Funding Your Vision

Invest in Real Estate for Tax Benefits and Asset Protection

Real estate, like the projects offered by Capital Management Group (e.g., Mayfair Luxury Apartments or Beach Village Life Hotel), can be an excellent way to shelter money due to tax advantages and asset protection.

• Tax Benefits:

  • Depreciation: Rental properties allow you to deduct a portion of the property’s value annually, offsetting rental income without out-of-pocket costs. For example, a $30M apartment complex like Mayfair could generate significant depreciation deductions.

  • 1031 Exchange: Defer capital gains taxes by reinvesting proceeds from a property sale into a like-kind property. This could apply to projects like Green Town Texas if you’re rolling over gains from other real estate.

  • Opportunity Zones: Investing in designated Opportunity Zones (potentially relevant for a project like Green Town Texas) can defer capital gains taxes until 2026 and eliminate taxes on new gains if held for 10+ years.

  • Tax Credits: Projects like Mayfair may qualify for low-income housing or historic preservation credits, reducing tax liability. If You like Municipal Bonds, Green Town is the way to go. 

• Asset Protection:

  • Holding real estate in a Limited Liability Company (LLC) or trust can shield personal assets from lawsuits or creditors. For instance, investing in Beach Village Life Hotel through an LLC could limit liability to the investment itself.

  • Real estate is less liquid, making it harder for creditors to seize compared to cash or stocks.

• Cash Flow and Appreciation:

  • Projects like Mayfair ($30M) or Beach Village ($15.51M) offer rental income and potential appreciation in high-demand markets (Wauwatosa, WI, and Carlsbad, CA). These generate passive income while sheltering wealth through tax deductions.

Why It Works: Real estate combines income generation, tax shelters, and legal protection. For example, depreciation on a $30M property could offset $1M+ in taxable income annually, depending on the structure.

 

Utilize Trusts for Asset Protection and Tax Planning

Trusts are powerful tools to shelter money from creditors, lawsuits, or estate taxes while controlling how assets are distributed.

• Example: Place an investment in Green Town Texas into an irrevocable trust to shield it from personal liabilities.

• Revocable Living Trusts: Offer less protection but allow control over assets during your lifetime and avoid probate. Useful for managing real estate investments like Mayfair Apartments.

• Dynasty Trusts: Minimize estate taxes across generations by holding assets in trust for descendants. Could be used for long-term projects like Green Town Texas to create generational wealth.

Why It Works: Trusts remove assets from your personal balance sheet, reducing exposure to taxes and legal risks. For high-net-worth individuals, an irrevocable trust could save millions in estate taxes.

Diversify with Tax-Efficient Investments

Certain investments minimize tax liability while preserving or growing wealth, complementing real estate or trust strategies.

• Municipal Bonds: Green Town is a Municipal Maintenance District which creates Municipal Bonds. Interest is exempt from federal and State taxes, ideal for high earners. For example, a 4% yield on a $1M municipal bond portfolio generates $40,000 annually tax-free.

• Permanent Life Insurance: Best for high-net-worth individuals needing liquidity and estate planning. For example, fund a policy with profits from Beach Village Life Hotel to shelter future gains.

Why It Works: These investments reduce taxable income and defer taxes, preserving more wealth. Municipal bonds alone could save a 37% bracket investor $14,800 annually on a $40,000 yield.

Offshore Accounts and International Strategies 

For ultra-high-net-worth individuals, offshore accounts or investments can shelter money, but they require strict compliance with U.S. tax laws.

• Offshore Trusts or Corporations: Example: Hold a stake in Green Town Texas through a Cook Islands trust for enhanced creditor protection.​

Strategic Charitable Giving

Donating assets to charities or setting up charitable vehicles can shelter money from taxes while supporting causes.

• Donor-Advised Funds (DAFs):  Contribute appreciated assets (e.g., stocks or real estate) to a DAF, take an immediate tax deduction, and recommend grants over time. Avoid capital gains taxes on donated assets.

  • Example: Donate a $1M appreciated stake in Mayfair Apartments to a DAF, deduct $1M, and avoid $238,000 in capital gains taxes (at 20% rate).

Integrating Capital Management’ Projects

The projects mentioned (Green Town Texas, Mayfair Luxury Apartments, and Beach Village Life Hotel) align well with a sheltering strategy, particularly through real estate’s tax and protection benefits:

• Green Town Texas ($9B):

  • Its 27 divisions allow targeted investments, reducing risk through diversification. The smart city and AI theme park concept taps into high-growth sectors, potentially qualifying for Opportunity Zone benefits or tax credits.

  • Strategy: Invest through an LLC or irrevocable trust for asset protection. Use depreciation and potential tax credits to offset income from other sources. Invest into Green Town Projects or Municipal Bonds

• Mayfair Luxury Apartments ($30M):

  • Offers stable cash flow and tax deductions (depreciation, mortgage interest). Wauwatosa’s strong market supports long-term appreciation.

  • Strategy: Hold in an LLC for liability protection. Consider a 1031 exchange in the future to defer gains into another property.

• Beach Village Life Hotel ($15.51M):

  • At 65% completion, it’s a lower-risk, near-term opportunity with diverse revenue (hotel, STR condos, retail). Carlsbad’s tourism market ensures demand.

  • Strategy: Use depreciation to shelter income. Fund a permanent life insurance policy with profits for tax-deferred growth.

Recommended Strategy

A balanced approach to sheltering money combines multiple strategies based on your net worth and goals:

• For Moderate Wealth ($1M–$5M):

  • Invest in Mayfair Luxury Apartments or Beach Village Life Hotel through an LLC for tax deductions and cash flow.

  • Hold Green Town municipal bonds or index funds in taxable accounts for liquidity.

• **For High Wealth ($5M–$50M):

  • Add an irrevocable trust to hold real estate investments like Green Town Texas for asset protection and estate tax reduction.

• For Ultra-High Wealth ($50M+):

  • Explore offshore trusts or offshore accounts for enhanced protection, but with significant legal oversight.

  • Invest in large Green Town Texas division for generational wealth creation, leveraging tax incentives.

  • Combine all above strategies for maximum tax efficiency.