Tax Savings. When setting up a revocable living trust, many people do so with the intention of saving money on taxes. In reality, using a revocable living trust does not save you any money when it comes to paying income taxes or capital gains taxes. With the maximum California state income tax rate at 13.3% for both ordinary income and capital gain, strategies to defer or eliminate California state income tax have greater importance. One strategy to consider is the creation of an irrevocable children’s trust in a state with no state income ...

Dec 22, 2008 · Our government and the IRS has given preferential tax treatment to vacation homes and other second homes by allowing the owners to keep all capital gains from sales of such homes, tax-free. There is a limit on the capital gains exemption of $500,000 for married joint filers.