Three options are available in purchasing systems: A current year purchase, a one-year carryback purchase, or a four-year carry forward purchase also with the one-year carryback option.

Purchase Price: $3,500 per system
Down Payment: $1,050 per system
Up Front Payment: 10% of the down payment or $105 per system

Tax Law is extremely complex and each taxpayer has his/her own unique set of circumstances. YOU SHOULD ALWAYS RELY ON ADVICE FROM YOUR OWN TAX ATTORNEY OR CPA.

OPTIONS

OVERALL STRATEGY: Our .0007 formula has been designed to give most taxpayers 1.5 times their money back in relation to their total down payment.  For example, for a $10K down payment following our formula, you may get back at least $15K in tax benefits. 

FORMULA OVERVIEW:
       1.  Current Year Purchase: Multiply what you expect to pay in taxes in 2012 by .0007
        2.  One-year carry back purchase: Add your 2011 & 2012 taxes & multiply by .0007
        3.  Four-year carry forward purchase: Add all the taxes you have paid and will pay from 2011 through 2016 & multiply by .0007.

The Current Year Purchase Option:

Objective: To zero out your taxes for 2012
Calculate Number of Systems to Purchase: Take what you think your taxable liability will be and times that by .0007.  (Round up)
Example: Taxable Liability is projected to be $10,000. (10,000 X .0007 = 7 Systems)
Purchase Price: 7 systems X $3,500 = $24,500
Down Payment: 7 systems X $1,050 = $7,350
Up Front Payment: 10% of $7,350 = $735 (Balance of Down Payment of $6,615 due when tax refund comes in 2013

Tax Credit: $24,500 X 30% = $7,350
Depreciation (Net Operating Loss): One half of the tax credit is $3,675.  Subtract that from the purchase price of $24,500 = $20,825.  Depreciate 60% or $12,495
Effect in Dollars In-Pocket from Depreciation: About $2,500 plus and the $1,600 in the following four years

What Happens: You get back or save about all $10,000 in your 2012 projected taxes.  In addition, there may be some state tax benefits on top of that. (Each state is different)
Money Details:
        A.  You purchased 7 systems and paid $735 up front
        B.  After your tax refund in 2013, you get your $735 back and pay us the balance of
              the down payment or $6,615 from your tax refund.
        C.  Your profit is created by your depreciation.
        D.  You part with $735 for a few months.  Then you get that back and the rest of the
              down payment plus another $4,000 (approximate plus state return benefits-in
              some states)! 
        E.  Don’t forget the residual income of $150 X 7 X five years = $5,250
              and $68 X 7 X 30 years = $14,280 (for a total of $19,530)

***Special Note: The greater one’s taxable liability, the greater will be the depreciation benefit based on a percentage.

The One-Year Carry Back Purchase Option:

Objective: To zero out your taxes for 2012 & get everything back from 2011.
Calculate Number of Systems to Purchase: Take what you think your taxable liability will be in 2012 plus what you paid in 2011 and times that by .0007.  (Round up)
Example: Taxable Liability is projected to be $10,000 plus there was $10,000 paid in 2010 taxes. (10,000 + 10,000 X .0007 = 14 + 1 with Round up)
Purchase Price: 15 systems X $3,500 = $52,500
Down Payment: 15 systems X $1,050 = $15,750
Up Front Payment: 10% of $15,750 = $1,575 (Balance of Down Payment of $14,175 due when tax refund comes in 2013

Tax Credit: $52,500 X 30% = $15,750
Depreciation (Net Operating Loss): One half of the tax credit is $7,875.  Subtract that from the purchase price of $52,500 = $44,625.  Depreciate 60% or $26,775 plus the remaining 40% can be depreciated over the next four years
Effect in Dollars In-Pocket from Depreciation: About $5,355 in the first year.

What Happens: You get back or save all $10,000 in your 2012 projected taxes. Much of that will be the result of your Net Operating Loss. Use the tax credit to make up any difference in your 2012 taxes and then go back and get all of your 2011 taxes.  (You are allowed to go back one year with tax credits)  There may be several thousand left over in tax benefits so that amount can be carried forward.  There may be some state tax benefits on top of that. (Each state is different)
Money Details:
        A.  You purchased 15 systems and paid $1,575 up front
        B.  After your tax refund in 2013, you get your $1,575 back and the balance
              of the down payment or $14,175 from your tax refund plus $4,250.
        C.  Your profit of $4,250+ is created by your tax credit.
        D.  You part with $1,575 for a few months.  Then you get that back and the rest of
              your down payment plus a possibility of several thousand more on a
              carry forward (approximate plus state return benefits-in some states)!
        E.   You made $4,250 ($20,000 –15,750 = $4,250) plus, whatever can be carried
               forward.  (40% of your depreciation total) 
        E.  Don’t forget the residual income of $150 X 15 X five years = $11,250
              and $68 X 15 X 30 years = $30,600 (for a total of $41,850)

***Special Note: The greater one’s taxable liability, the greater will be the depreciation benefit based on a percentage.

The Four-Year Carry Forward Purchase Option:
Objective: To get back all the taxes paid in 2011, to zero out your taxes for 2012 and to create credits and depreciation benefits from 2012 through 2016. 
Calculate Number of Systems to Purchase: Add up all the taxes paid in 2011 and what you expect to pay in 2012. Then estimate what you might pay in taxes from 2012 to 2016. Add these amounts and times that by .0007.  (Round up)
Example: Taxable Liability is projected to be $100,000 (100,000 X .0007 = 70 Systems (round up optional when it’s even)
Purchase Price: 70 systems X $3,500 = $245,000
Down Payment: 70 systems X $1,050 = $73,500
Up Front Payment: 10% of $73,500 = $7,350

What To Do with Your Refund In 2013:  Let’s say you only used 25 of your 70 systems to zero out your taxes for 2011 and 2012.  Just pay us for 25 systems and then you pocket the rest.  Remember, you’ve already paid $7,350 towards the 25 systems.  Then follow the same procedure each year through 2016

Tax Credit: $245,000 X 30% = $73,500
Depreciation (Net Operating Loss): One half of the tax credit is $36,750.  Subtract that from the purchase price of $245,000 – 36.750 = $208,250  Depreciate 60% or $124,950 plus the remaining 40% can be depreciated over the next four years
There may be some state tax benefits on top of that. (Each state is different)

Money Details:
        A.  You part with $7,350 for a few months.  Then you get that back plus the rest of
              your down payment.  Then just pocket the rest and then follow the same procedure in
              2013 to zero out your taxes again.    (There also may be state return benefits)
        B.  Don’t forget the residual income of $150 X 70 X five years = $52.5K
              and $68 X 70 X 30 years = $142,800 (for a total of $195,300)

***Special Note: The greater one’s taxable liability, the greater will be the depreciation benefit based on a percentage.

RAPOWER3
PAYMENT OBLIGATION

General Explanation:  There are a number of different scenarios and reasons RaPower3 Team Members purchased the number of systems they do or did.  Because of this, we have three different payment plans in order that our RaPower3 Team Members can meet their down payment obligation after their initial Upfront Costs.  We believe these three payment plans are both fair to our members and fair to RaPower3 which must have funds to grow its business.

Payment Plan One:  Pay off the entire down payment amount with the first refund check or amount saved.  This plan is for those team members who purchased systems for the tax benefits just for the current year and/or the one-year carryback option.
        Example:  Let’s say a team member purchased 30 systems.  The down payment is $1,050 X 30 = $31,500.  The 10% upfront cost = $3,150.  Amount of the down payment owed is $31,500 less the $3,150 = $28,350.

If the member used our formula correctly, then the federal refund check to be paid either this year or in 2013 should be about $$47,000.  So pay your $28,350 obligation and pocket the rest.

        Bonus Monies:  With the entire down payment obligation paid, the Team Member is thus eligible to receive 100% of the bonus on all thirty systems.

Payment Plan Two:  Use 60% of your future refunds or savings to reduce the amount of your down payment obligation.  This plan is for those team members who purchased systems for the tax benefits in our carry forward option plans. 
          Example:  Let’s say a team member purchased 30 systems.  The down payment is $1,050 X 30 = $31,500.  The 10% upfront cost = $3,150.  Amount of the down payment owed is $31,500 less the $3,150 = $28,350.

The member purchased systems, for example, with the idea of using about five systems per year until 2016.  Therefore, in April-June 2012 or 2013, the member gets a refund of $10,000.  Simply pay us 60% of that or $6,000 and then pocket the rest.  Let’s add $6,000 plus the initial upfront cost of $3,150 = $9,150 paid.  This means the down payment of $31,500 has been reduced by $9,150 leaving a balance owed of $22,350.  Then all the team member does is follow the 60% rule each succeeding year until the entire down payment obligation is paid.

        Bonus Monies:  If bonus monies were to be paid while $22,350 was still owed, the team member would only receive about 30% of the bonus.  The other 70% would be held by RaPower3 until the team member paid the down payment obligation.  Payments toward the balance can be made at any time.

Payment Plan Three:  Pay 10% again in April-June of 2012 or 2013 and likewise each succeeding year until the entire down payment is paid. This plan is for those team members who purchased systems and pay little or no taxes.
         Example:  Let’s say a team member purchased 30 systems.  The down payment is $1,050 X 30 = $31,500.  The 10% upfront cost = $3,150.  Amount of the down payment owed is $31,500 less the $3,150 = $28,350.

This member purchased systems with the idea of gaining revenue from bonus monies, commissions, rental income and/or future taxes.  Therefore, in April-June 2012 or 2013, let’s say this member gets no refund.  Simply pay us 10% or another $3,150.  Let’s add $3,150 plus the initial upfront cost of $3,150 = $6,300 paid.  This means the down payment of $31,500 has been reduced by $6,300 leaving a balance owed of $25,300.  Then all this team member does is follow the 10% rule each succeeding year until the entire down payment obligation is paid.

        Bonus Monies:  If bonus monies were to be paid while $25,300 was still owed, the team member would only receive 20% of the bonus.  The other 80% would be held by RaPower3 until the team member paid the down payment obligation.  Payments toward the balance can be made at any time.

** Tax Law is extremely complex and each taxpayer has his/her own unique set of circumstances.  Above, we have given general information we deem to be correct, but YOU SHOULD ALWAYS RELY ON ADVICE FROM YOUR OWN TAX ATTORNEY OR CPA.