Sam and Mary were age 55 when they purchased some development land outside of town. They thought it would be a good investment that they could later sell for a higher price.
Over the years, the development from the town has moved toward the property and their land is now next to a large commercial store. They now rent the property to the commercial store and it is used for overflow parking.
They decided it would be nice if they could sell without paying a large tax. Their tax advisor has told them that if they were to sell, there would be a large capital gains tax. They also felt they could use some tax deductions this year.
The good news is that Sam and Mary can use a special trust to receive three very nice benefits. The benefits are: