HOW THE ESCROW PROGRAM WORKS
In this edition of the Real Estate Revolution, we will discuss How the Escrow Program works.
The Escrow Program is unique in that it provides each program participant with a FREE Nevada corporation (valued at over $3,000.00) and transfers the participant's property into the name of that corporation. Then when the property is sold, the corporation sells it not the program participant.
THE CORPORATION INCLUDES:
NV Secretary of State articles of incorporation
NV Secretary of State initial list of officers
NV Secretary of State incorporation expedite service (if needed)
Corporation records book
Corporation IRS EIN number
Corporate compliance CD (includes manuals, minutes & contracts)
Corporation address in Nevada for first year
Bank introduction to Wells Fargo Bank in Nevada for the required corporate bank account
By selling a property titled in the name of this corporation, the program participants eliminate state and self-employment taxes immediately (See the overview on this in this Proposal or IRS Code Section 1402 and/or IRS Publication 533). In addition, the corporation pays no capital gains tax because it is IN the real estate business and the income derived from the sale is considered "ordinary income" to the corporation (The authority for this can be found by reviewing the information concerning Ordinary Or Capital Gain Or Loss in IRS Publication 544, also see the overview on this in this Proposal). Additionally, the federal taxes can be written down to almost nothing because of the many "write offs" that are available to the C-Corporation but not to an individual, an LLC or even an S-Corporation (The authority for this can be found by reviewing the information concerning Business Expenses in IRS Publication 535, also see the overview on this in this Proposal).
NOTE: Should the corporation not be able to totally eliminate its taxable income the corporation would be required to pay taxes ONLY on the NET amount remaining in the company at the end of the tax year (if any). At the end of the year, should the corporation not "spend" all its income and providing the remaining NET taxable amount did NOT exceed $50,000, the corporation would be taxed at 15%. As the program participant can plainly see, this is a far cry from the taxability that the program participant would endure if the property were sold in the name of the program participant or through a "pass-through entity" such as an LLC or "S"-Corporation.
To facilitate a smooth transaction, the program participant and CGR will enter into an agreement wherein the program participant will retain the total amount of the proceeds derived from the sale of the property less the flat fee that "CGR" will receive for providing its services.
NOTE: It is important to understand that the fee that "CGR" charges will not be paid out of the program participant's "profits" from the sale of the program participant property or from the program participant. "CGR" fees are derived from the "savings" that "CGR" will help the program participant realize and are paid directly out of the escrow.
LASTLY, simultaneously with "CGR" being paid its fee from the escrow, "CGR" will transfer the corporation records book, original corporate documentation, and all of the corporate stock to the program participant without further cost.
All in all, it is expected that the program participant should be able to retain at least 45% more of the money that the program participant would have realized from the sale had it been sold in the program participant personal name, the name of an LLC or even if the property was sold in the name of an S-Corporation.
