If you’ve ever sold a business, investment property, or even cryptocurrency, you’ve probably felt that sinking feeling when the word “capital gains tax” comes up. After years, sometimes decades, of building value, it can feel frustrating to see up to 30 to 50% of your profit disappear to taxes.
But what if there was a legal, proven way to defer capital gains taxes, keep your money working for you, and even create passive income at the same time?
That’s exactly what Brett Swarts and his team at Capital Gains Tax Solutions are teaching with the Deferred Sales Trust (DST), a strategy that’s quickly becoming a game changer for entrepreneurs, investors, and real estate professionals looking to make smarter exits.
Why Traditional Tax Deferral Isn’t Enough
Many investors are familiar with the 1031 Exchange, which allows you to defer capital gains taxes when selling an investment property, but only if you reinvest in another “like kind” property within strict time limits. That means you’re often rushed to buy another asset that may not even fit your investment goals.
One of the key benefits of a DST is greater flexibility with your reinvestment timeline. Rather than working within the deadlines of a 1031 exchange, sellers can explore investment opportunities that align with their broader financial goals.
The goal is to defer taxes while creating more time and flexibility to reinvest wisely.
The Power of the Deferred Sales Trust (DST)
Here’s how it works in simple terms:
When you sell your appreciated asset, a business, real estate, or even crypto, instead of receiving the proceeds directly, the sale goes into a trust. This trust, managed by a licensed third party trustee, issues you an installment note. You receive payments over time, and as you’re paid, the tax liability is recognized gradually.
That means:
- You defer immediate capital gains taxes.
- You can reinvest the proceeds in other opportunities, including real estate, the stock market, or even new ventures.
- You maintain control and liquidity, without the pressure of 1031 exchange deadlines.
In short, the DST lets you sell high, reinvest smartly, and keep your wealth growing instead of handing a huge chunk of it to the IRS.
Debunking the “Too Good to Be True” Myth
Naturally, many CPAs and investors hesitate when they first hear about the DST. It’s a new concept to most, and skepticism is healthy when it comes to tax strategies.
One common objection comes from an old California Franchise Tax Board notice, often misinterpreted by bloggers and CPAs as suggesting that DSTs aren’t legal in California. Brett Swarts breaks this down clearly: that notice was directed only at Qualified Intermediaries in failed 1031 exchanges, not at investors using a DST.
California conforms to IRS code 453 (installment sales), which is exactly what the DST uses. The issue was about withholding, not legality. In other words, when done properly with the right team, the DST is fully compliant and proven, with a 100% audit success record across thousands of transactions.
Who Qualifies for a DST?
The Deferred Sales Trust works best for people selling highly appreciated assets, typically with at least $1 million in net proceeds and $1 million in gain. That includes:
- Commercial or investment real estate
- Privately held businesses
- Cryptocurrency or NFTs
- Stocks, art, or collectibles
It doesn’t apply to small sales or personal use property unless structured carefully.
Why Having the Right Team Matters
Setting up a DST isn’t a DIY project. It requires coordination between financial advisors, tax attorneys, trustees, and sometimes real estate or M&A professionals. The good news? Capital Gains Tax Solutions works hand in hand with your CPA and advisors to make sure everything is structured properly.
In fact, one of the most valuable features is lifetime audit defense. The legal team behind the DST will represent your trust at no additional cost for the life of the agreement. That’s peace of mind you won’t find in most tax strategies.
Think Beyond Cash Flow. Think Tax Flow.
As Brett Swarts often says, “It’s not just about cash flow. It’s about tax flow.” Building an effective exit plan means aligning both your capital strategy and your tax strategy so they work together.
Whether your goal is retirement freedom, business diversification, or simply keeping more of what you’ve earned, the key is planning early, not at the closing table. Deals can fall apart when time runs out, and the biggest missed opportunity is waiting until it’s too late.
Final Thoughts
If you’re considering selling a highly appreciated asset, don’t let taxes dictate your next move. The Deferred Sales Trust offers a legal, time tested solution to defer taxes, stay flexible, and preserve your wealth.
To learn more, visit CapitalGainsTaxSolutions.com and you’ll discover how to create your own Capital Gains Tax Exit Plan and take control of your financial future.