Living Your Best Life: Capital Gains Tax Solutions
Silicon Valley Technology Expert Finds A ‘Deferred Sales Trust’ To Break Open A Clear Path To Sell Cryptocurrency To Defer Capital Gains Tax
by Brett Swarts founder of Capital Gains Tax Solutions, LLC
Can I save capital gains tax when selling cryptocurrency? The answer is, “yes.” About 7 years ago, Peter and his wife purchased their first Ethereum. Who would have anticipated that the value would have increased by thousands of percent in just a few years? Peter, who has worked in the technology field for more than 20 years, saw a great opportunity to sell in late 2017, however, without a clear legal plan to defer the large capital gains tax, found himself feeling trapped by the consequences of selling.
Peter held on to his belief in the fundamental value of ethereum and the potential business opportunities it brought to end-users during the 2018 crash when the value of ETH fell from $1,432 to below $90. “That was a tough pill to swallow,” Peter continued. Fortunately, everything returned in 2021, and much more. In early 2021, Peter met Jessica Lanning of Lanning Financial who told him about the Deferred Sales Trust and introduced him to Brett Swarts of Capital Gains Tax Solutions. Then in May of 2021, ETH reached an all-time high of $4362. “I knew it was time to sell at least a big portion of my stock since I didn’t want to miss this opportunity again. Let’s just say it’s been a long three years since the high in 2018.”
We all know that not every narrative has a happy ending, especially when it comes to cryptocurrency trading. So by the time, Peter decided to establish the Deferred Sales Trust (DST) and the time it took to set up a DST crypto exchange account at Kraken.com the value dropped from a high of $4,172 in May of 2021 to $1,818 in July 2021. “Talk about reliving the past. That was a stressful few months. I had resigned from my corporate tech job, which was partially predicated on selling ETH into the DST and relying on the DST’s cash flow. We were so close to finishing everything, but we ran out of time.” So Peter did what he always did and bet on the future of ETH, setting a target exit price of $3,000 for trading.
On August 7th, 2021, ETH surpassed the $3000 mark. “This was the moment my family and I had been looking forward to for a long time. I wanted to put a significant amount of money into the Deferred Sales Trust. So, with the help of Capital Gains Tax Solutions‘ Brett Swarts, I was able to transfer ETH into the DST. Consider the following scenario: I was transferring ETH and BTC into the DST crypto exchange account while on the phone with Brett. I was nervous about moving the market by placing large sell orders, so over the next hour and a half, I split up my order into a number of smaller limit orders, while Brett gave me the Google 2FA codes over the phone to submit these orders. It was a bit stressful because there were some wild downswings in the ETH price as I was trying to get these orders to fill. However, within those 2 hours, I was able to liquidate my crypto above my target price, and from there we were able to fund the trust bank account. ”
While Peter previously spent most of his time working in the IT industry, he now has more time to spend with his family, travel more, and build a cryptocurrency-focused startup technology company, which he has always wanted to accomplish. Prior to the DST, the largest roadblock to selling his cryptocurrency was capital gains tax, which was expected to be over 28% of the sale price.
See below hypothetical example for a $1,000,000 gain and net proceeds of a coin sold and transferred into DST:
❌ Sample state capital gains tax rate 4.2%.
❌ Federal capital gains tax rate of 20%.
❌ Medicare tax of 3.8%.
Total combined around 28% of $1,000,000 = $280,000 in tax liability 😬
Total potential return is 8% payout from DST on the full $1,000,000 vs $720,000.
Peter and his wife were hesitant to sell since it would result in a tax obligation of 37 percent of their profit since they are in the state of CA where the state tax rate is 13.3%. They chose to defer this capital gains tax and release the extra 37 percent in profits in order to enjoy more of their “best life,” which meant selling their coins.
Hypothetical example for a $1,000,000 gain and net proceeds of coin’s sold and transferred into DST for California residents:
❌ Sample state capital gains tax rate 13.3%.
❌ Federal capital gains tax rate of 20%.
❌ Medicare tax of 3.8%.
“This was the most sensible option. Before meeting Jessica Lanning and Brett Swarts and having time to fully vet and understand the Deferred Sales Trust, my wife and I were undecided about selling. It didn’t make sense to pay taxes at a rate of 37%. To be honest, I thought the Deferred Sales Trust seemed too good to be true at first. Although crypto was new to the DST, working with Jessica and Brett made all the difference in providing me with peace of mind when it came to safely and securely transferring my holdings,” Peter explained.
Do you want to sell your highly appreciated cryptocurrency?
Put Jessica Lanning’s and Brett Swarts’ years of experience, as well as the knowledge of the Deferred Sales Trust, to work for you so you can continue to “enjoy more of your best life” for decades to come. Learn more here.
Deal Highlights, Stats & Life Transformation:
- 37% capital gains tax rate – state of CA + Federal + Medicare Tax = large amount of tax-deferred
- Desire to sell and diversify wealth + purchase Lake Tahoe Rental Cabin
- Quit Day Job
- Deferred Sales Trust helped Peter and his family defer a large capital gains tax and provides transformational amount of equity to invest and live off the cash flow.
- Chance to double retirement income.
It might be difficult to sort out capital gains tax deferral strategies. It’s also difficult to discover a tax deferral technique with a proven track record that provides debt relief, liquidity, diversification, and the option to move cash outside of your taxable estate without using a 1031 exchange. That is why we created Capital Gains Tax Solutions and offer The Deferred Sales Trust (DST) so you or your clients never have to worry about capital gains tax or a 1031 exchange again when selling any asset. This includes cryptocurrency, a primary residence, investment real estate, or a business. Get a better understanding of the distinctions between each tax deferral method you’re thinking about today; including the Delaware Statutory Trust, Charitable Remainder Trust, 1031 exchange, Opportunity Zones and learn more about The Deferred Sales Trust™ (“DST”) today by downloading a free e-book, Sell Your Business Or Real Estate Smarter here at http://www.capitalgainstaxsolutions.com.
Ready to learn more?
Here is a video of Shark Tank’s Kevin Harrington talking about selling public stock and frustrations with capital gains tax deferral options. Read about more Advantages of The Deferred Sales Trust™ (“DST”) in a recent article here.
About Brett Swarts:
Brett Swarts is recognized as one of the most knowledgeable and informative experts on capital gains tax deferral and Deferred Sales Trust™ (“DST”). His audiences and clients are challenged to design and implement a tax-deferred transformational exit wealth strategy using the DST in order to create and preserve more wealth.
Brett is the Founder of Capital Gains Tax Solutions and host of the Capital Gains Tax Solutions podcast. He’s also a seasoned commercial real estate broker with eXp Commercial with expertise in the sale of investment properties, 1031 exchanges, and Delaware Statutory Trusts. Each year, he provides the Deferred Sales Trust to hundreds of high-net-worth clients, cryptocurrency experts, CPA’s, Financial Advisors, M&A Advisors, CRE Brokers, luxury real estate agents, and other business professionals.
About Jessica Lanning:
Jessica Lanning is a certified financial planner with Lanning Financial Inc. She brings focus and perspective to your individual financial needs to identify your opportunities for investment and wealth. As a former practicing lawyer, she brings a comprehensive approach to legal, tax, and financial challenges so that her clients can enjoy peace of mind. A huge proponent of conscious decision-making, Jessica makes sure her clients are educated and informed so that they make sound decisions with clarity and confidence.
