© 2022 M&T Bank and its affiliates and subsidiaries. All rights reserved.
Wilmington Trust is a registered service mark used in connection with various fiduciary and non-fiduciary services offered by certain subsidiaries of M&T Bank Corporation including, but not limited to, Manufacturers & Traders Trust Company (M&T Bank), Wilmington Trust Company (WTC) operating in Delaware only, Wilmington Trust, N.A. (WTNA), Wilmington Trust Investment Advisors, Inc. (WTIA), Wilmington Funds Management Corporation (WFMC), and Wilmington Trust Investment Management, LLC (WTIM). Such services include trustee, custodial, agency, investment management, and other services. Loans, credit cards, retail and business deposits, and other business and personal banking services and products are offered by M&T Bank, Member FDIC.
M&T Bank Corporation’s European subsidiaries (Wilmington Trust (UK) Limited, Wilmington Trust (London) Limited, Wilmington Trust SP Services (London) Limited, Wilmington Trust SP Services (Dublin) Limited, Wilmington Trust SP Services (Frankfurt) GmbH and Wilmington Trust SAS) provide international corporate and institutional services.
WTIA, WFMC, and WTIM are investment advisers registered with the U.S. Securities and Exchange Commission (SEC). Registration with the SEC does not imply any level of skill or training. Additional Information about WTIA, WFMC, and WTIM is also available on the SEC's website at adviserinfo.sec.gov. 
Private Banking is the marketing name for an offering of M&T Bank deposit and loan products and services.
M&T Bank  Equal Housing Lender. Bank NMLS #381076. Member FDIC. 
Investment and Insurance Products   • Are NOT Deposits  • Are NOT FDIC Insured  • Are NOT Insured By Any Federal Government Agency  • Have NO Bank Guarantee  • May Go Down In Value  
Investing involves risks and you may incur a profit or a loss. Past performance cannot guarantee future results. This material is provided for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service. It is not designed or intended to provide financial, tax, legal, accounting, or other professional advice since such advice always requires consideration of individual circumstances. There is no assurance the any investment, financial or estate planning strategy will be successful.

Tax reform passed in 2017 created major changes and opportunities for high-net-worth taxpayers, particularly those who are real estate developers. Planning for the ultimate continuation or sale of your business is as important as growing your business. From a strategic planning perspective, real estate developers may want to consider targeted trust strategies.

As a real estate developer, you may be in a favorable income tax position because of the nature of your business and the assets you employ in that business. Assets such as depreciable buildings, depreciable construction machinery and equipment, as well as other business assets, may provide income tax deductions that effectively shelter much of your income. These income tax benefits may be realized by you as a sole proprietor of your development business or as owner of various pass-through entities, such as partnerships or limited liability companies that hold your real estate development assets.

Let’s take a look at today’s tax laws and then we’ll explore some specific strategic planning opportunities using trusts that may be of value to real estate developers.

For 2022, the estate, gift, and generation-skipping transfer (GST) tax exemption is historically high at $12.06 million for individuals and $24.12 million for married couples. There are still seven individual tax brackets, with a  top rate of 37%. The standard deduction is currently $12,950 for individuals and $25,900 for married couples. In addition, the corporate tax rate sits at 21% (www.irs.gov).

Many of the provisions of the current tax law affecting individuals are scheduled to sunset after December 31, 2025 (www.irs.gov), at which time the prior provisions of the tax law would return if no further legislative action is taken. However, with a new administration in the White House, change could occur well before that time.

Please see important disclosures at the end of the article.

Stay Informed

Subscribe

Sign up here to receive insights designed to help you succeed.

Sign Up Now

WTU Newsletter Card
WTU Newsletter Handler