It is a tool used by business owners(even partial owners) to legally reduce income taxes while creating future wealth and income at the same time.

It isn’t a tax scheme, or a traditional qualified plan of any kind. It’s in use for almost two decades by both big and small businesses and is used and analysed by the IRS almost twenty times with no changes needing to be made.

What does a RPT do for a business owner?

A Restricted Property Trust gives the owner the ability to fund the trust and have most of the funding be tax deductible every year. This will save the business owner potentially hundreds of thousands of dollars in taxes over a five to ten year period.

Here are some details of how and why the trust is used for tax deductions and wealth creation:-

A Restricted Property Trust (RPT) is formed by a professional well versed in this type of trust and in conjunction with your CPA or tax attorney. The minimum contribution to the trust every year is 50,000 USD in five year blocks of time and a business owner and fund it with much more if they are confident in their ability to fund this plan for at least five years.

Most of this funding will be tax deductible in the year of contribution and a $100,000 annual contribution will be the sample funding amount. seven to eight percent of that funding amount will generally be tax deductible. A commitment to fund that $100,000 per year must be made for every year in 5 year blocks or the monies contributed will be forfeited to charity.

A business owner should only make this commitment if they have very stable income and/or significant liquid resources they could draw from to make the annual contributions. Due to tax laws and other details the annual contributions will be used to fund a Whole life insurance policy creating cash value and a death benefit so the business owner would have to qualify physically for the program along with financially.