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What Should You Know About Restricted Property Trust?

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Are you a successful business owner? If so, it’s important for you to pay attention to the Restricted Property Trust – a great approach followed by highly taxed business owners to lessen income taxes and grow their assets in a safe way.

What is a Restricted Property Trust?

It’s a plan that allows for considerable Before Tax Contributions, Defer Taxes on Growth, and Tax Advantaged Distributions. All these make the RPT a great alternative to other plans sponsored by employers.

Although it can be established by an S Corporation, C Corporation, LLC, or Partnership, it cannot by a sole proprietorship. The primary objective of this plan is to deliver tax-favoured contributions not only to business owners but main employees as well.

One of the reasons why so many business owners rely on RPT is the fact that it provides long-term cash accumulation being favoured by tax. Moreover, it can yield great results when compared to an alternative investment earning around 8%.

“A Restricted Property Trust, however, is not for everyone! Why? This is because the planned funding must not be for less than 5 years. Besides, any plan extensions should not be for less than 5 years. In case the company is not able to make the contribution to the RPT on an annual basis, the assets are ceased to a planned charity as per the owner’s choice.”

In other words, the RPT is a useful employee benefit plan providing a 100% deduction in corporate tax and includes partial current income. That way it leads to a considerable net current deduction to owner employees.

We understand that people have been making the most of trusts, deemed to be a wealth building and wealth preservation tool, for hundreds of years. There’s no denying that all every specific trust has a specific role to play. And there is the one that has largely been designed for business owners earning high incomes so that they are able to put more money aside for retirement compared to a conventional retirement plan. Business owners will be able to save a considerable amount of money on a tax deductible basis.

Not only are all annual contributions totally deductible by the employer, they are somewhat taxable to the participant.

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