Tax deferral option

Allowing the capital gains tax on an asset to be payable only when the gain is realized by selling the asset.

Tax Deferral Option

The right of a taxpayer to refrain from paying capital gains tax on the price appreciation of an asset until he/she has locked in that appreciation by selling the asset. Suppose one bought a stock at $5 and its price is currently $15. Theoretically, the person owes capital gains tax on the extra $10, but the tax deferral option means that he/she will not have to pay until he/she sells the stock.

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Singapore imposes a corporate statutory tax rate of 17% and offers a productivity and innovation credit that allows a 400% superdeduction on certain qualifying R&D expenses up to SGD $400,000; 100% and 150% superdeductions on certain expenses above SGD $400,000; a nontaxable cash payout option for up to SGD $100,000 of qualifying expenditures; and a tax deferral option. The Singapore government also offers multiple grants covering multiple fields of innovation.

Global R&D incentives compared

* Discrimination: If the seller takes advantage of the capital gains tax deferral option, family members of the seller and 25% of the stockholders must be excluded from the ESOP

Pros and cons of ESOP

The tax deferral option, according to Schmalz, is enhanced by another change in the Clinton tax plan.

Industry victor in budget plan

These transactions can offer not only tax deferral options, but the ability to structure different tax treatments for different ownership entities, a continuing investment of pre- tax proceeds, increased levels of liquidity, varying degrees of continuing control, asset diversification, public market execution, and the ability for partners to make independent investment decisions.

Wanted: Manhattan rental properties

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