1031 Exchange vs Deferred Sales Trust – Buy At Optimal Timing



Hi, I’m Brett Swarts, Founder of Capital Gains Tax Solutions, where we use the Deferred Sales Trust to help you escape feeling trapped by capital gains taxes. In this video series, we’re going to walk through the top 8 reasons why you would consider a Deferred Sales Trust versus a 1031 Exchange. 

Both of these tax deferral strategies have their benefits. But the Deferred Sales Trust has some unique benefits that might help you solve whatever challenges you’re trying to solve with your wealth, and the ability to defer capital gains tax. Let’s dive into number one. Number one is the ability to buy back in and out of the real estate at optimal timing. What do we mean by that? Let’s start with 1031 Exchange. The intent with a 1031 Exchange is to do tax deferral, which is very important. But the second part of it is to be able to buy real estate, which is also very important. But the challenge becomes this timing restriction, and you’ve probably been through it yourself, where you have 180 days to close, and only 45 days to identify a select number of properties. What happens oftentimes, you end up overpaying for a property or end up finding a property that you otherwise wouldn’t pay for. You feel pressured, you feel rushed, and the seller knows that you’re in a 1031 Exchange or finds out, and it makes it even more challenging to make a deal on your property that you’re going to be purchasing. 

The Deferred Sales Trust solves all of that, in that you don’t have to buy back into real estate at all, or even buy within any certain time frame. Since you live to eliminate the timing restriction, you can change markets, and we have to say that at optimal timing and meaning buy whatever you want to imagine it was 2008 all over again and you knew it was coming. What would you have done, you would have maybe bought real estate up until the point where everything kind of crashed, and you would have waited on the sidelines and bought everything tax-deferred. That is true now with the Deferred Sales Trust, you can now sell highly appreciated investment, real estate, sit on the sidelines, where’s the silent stocks, bonds, mutual funds of your choosing, and then back into commercial real estate if and when you want to. But the key thing is at optimal timing when the deals make sense, and when you find an opportunity that you’re buying it based upon cash flow and the intrinsic value of the real estate versus buying it just to defer the tax with a 1031 Exchange.

Thank you so much for watching this video. Look for the next one that’s coming out soon on why to use a Deferred Sales Trust versus a 1031 Exchange.




Closed Deal Story


Selling Bitcoin, Ethereum Capital Gains Tax-Deferred Using the Deferred Sales Trust


I believe that is where we’re at with cryptocurrency’s current marketplace. We closed the first Bitcoin and Ethereum case for $5 million and helped the client defer around $1.5M in capital gains tax. Now we’re getting a wave of individuals who are finding us. You might be finding us right now.

One of the biggest challenges with folks who are selling cryptocurrency is they want to be able to diversify, they want to be able to time the real estate market and or even the crypto market, they want to be able to have some liquidity, some cash flow, and so part of this vision is taking helping our clients who are in cryptocurrency, buy an investment, real estate, all tax-deferred, using the Deferred Sales Trust, also invest with Jake Mellor as the financial advisor to in a diversified investment grade security or start a business. Whatever the outcome that you want to do. Why is it that you’re investing with any type of asset? What if you could sell high, diversify, and buy back in whenever you’d like to? This is what we’ve already done and we’re doing, we’ve already proven it.

Read The Full Case Study Here



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