“If I were to sell, I would be killed with capital gains taxes. Plus, I don’t want to do another 1031 Exchange and start over with a new property and new management responsibilities.”

November 19, 2018

 



I have heard this story from multiple clients over the years. I’ve heard it said the best companies are started by solving a problem. Capital Gains Tax Solutions was launched to give flexibility and options to all real estate and business owners. 

It eliminates the need for a 1031 exchange since the primary need is to defer capital gains taxes by using a tool called a deferred sales trust. It also allows an investor to buy back into real estate at their own timing. My goal in buying real estate has always been to buy low and sell high and the DST gives this option.

The funds can also be invested in stock, REITS, bonds and mutual funds for those who want to be rid of the toilets, trash and day to day management responsibilities.

 

The Deferred Sales Trust is a capital gains tax deferral tool which could save you thousands of dollars, and by having the opportunity to potentially make a profit on the money you would have paid to Uncle Sam in the year of the sale instead of a 1031 exchange. This strategy is gaining popularity among those who have highly appreciated assets that will be marketed for sale or business owners. You too can potentially take advantage of this opportunity once you understand how it works.

The process starts with initial due diligence. If the transaction is viable, the trust and property owner will negotiate to reach terms with regard to the asset(s). Then the property owner sells their property to a trust owned by a third-party company (CGTS). The trust sells the property and pays you per the contract terms, making payments to you over an agreed period of time. There are typically minimal taxes to the trust on the sale since the trust purchased the property from you for the price that it anticipates that it can be sold for. The payment is made with an installment contract which makes payments to you over an agreed period of time.

The options on when and how payments can be made are flexible. You may have other income and don’t need the payments right away. The tax code doesn’t require payment of the capital gains tax until you start receiving installment payments. The capital gains tax is paid to the IRS with an “installment plan” since only that portion of capital gains tax is due in proportion to the number of years established in the term of the installment agreement.

The Deferred Sales Trust has the potential to generate more money over the long run than a direct and taxed sale. There may be a more suitable or appropriate tax structure depending on your circumstance. If you would like to discuss your specific circumstances and goals at no cost or for a FREE tax savings analysis on a commercial or investment property, or a business you own, please visit http://mydstplan.com/taxsolutions or email me at Brett@capitalgainstaxsolutions.com

What is deferred sales trust 

and can it rescue a failed 1031 exchange?

It is a form of a structured Installment Sale which allows you to defer capital gains taxes on the sale of a business or real estate. The Estate Planning Teams proprietary structure, the “Deferred Sales Trust” (“DST”), is an exit strategy for those who want to dispose of highly appreciated assets while deferring the associated capital gains and depreciation recapture taxes. It is a 1031 Exchange alternative and rescue (must put into trust by day 179) that does not require the taxpayer to reinvest in like-kind property and is not subject to the onerous 45 and 180 day deadlines of a 1031 Exchange.

FAQ: visit https://capitalgainstaxsolutions.com/faq/

How much can I defer in taxes using the deferred sales trust?

For a FREE tax savings analysis on a commercial or investment property, or a business you own, pleaser go to mydstplan.com/taxsolutions and complete the request for analysis form.

Most investors, real estate or business owners struggle with capital gains tax when they sell their assets. We use a deferred sales trust to help them gain tax deferral, freedom, liquidity and diversification with their funds so they can create and preserve more wealth. 


   – Brett Swarts
Founder and CEO  

#2 Defer Cap Gains taxes on real estate, a business, bitcoin or other virtual currencies and invest back into real estate. It’s sort of like a 1031 exchange for your bitcoin.

Receive those credit card offers in the mail for 0% interest offers? Throw them away like me? This post starts with a story of a friend of mine who, 4 years ago, started using those credit card offers to purchase bitcoin. I laughed out loud, like you may be doing now, when I heard of such a scheme, however, after Bitcoin hit $11,679 this morning, who’s laughing now? Just $100 a few years ago would be worth around $100M today. It seems as though we are watching a fantasy wall street movie unfold before our eyes.

My reply and logic then goes something like this, “the bitcoin may crash and he can lose it all…..too much risk” True. The market seems high, but so did the 2007 real estate market before the crash. Is there a better way to defer the capital gains taxes and reduce the risk of loss for such real estate or bitcoin? The answer is yes. With the deferred sales trust an investor can put all of the cash from the sale of real estate, a business, bitcoin and other virtual currencies, including the capital gains taxes into a deferred sales trust (keeping the funds tax deferred), invest it into conservative bonds and wait for a correction, and invest into commercial real estate that is producing cash flow.


How much bitcoin do you have or how much highly appreciated real estate do you have? What if you could take the gains from this record setting marketplace and sit on the sidelines and wait for values to soften and then buy back in? Sell high and buy low? What a concept.

Simple concept really. If it were 2007 all over again and you could go back, knowing what happened, would you have sold and paid the capital gains taxes and waited for the crash? I don’t think it is 2007 all over again, however, I did speak with a major apartment family office in Sacramento California who sold $100M in real estate in the 2006 time frame and paid the capital gains tax because they felt the correction was coming. Unfortunately, I did not speak with them until 2010 when he had already paid the capital gains tax. His quote was, “you’re telling me I paid $35M in capital gains taxes and could have deferred some or all of it using a deferred sales trust and put the money into conservative aaa bonds and waited for the correction in the market I thought may come?” The answer, again, is YES.

Capital Gains Tax Solutions was launched to give flexibility and options to all real estate and business owners (and now bitcoin or other virtual currencies owners) who want to sell but also want to defer the capital gains taxes. The deferred sales trust eliminates the need for a 1031 exchange since the primary need is to defer capital gains taxes. It also allows an investor to buy back into real estate at their own timing. My goal in buying real estate has always been to buy low and sell high and the DST gives this option. The funds can also be invested in stock, REITS, bonds and mutual funds for those who want to be rid of the toilets, trash and day to day management responsibilities.

The Deferred Sales Trust is a capital gains tax deferral tool that could save you  thousands of dollars by giving you the opportunity to potentially make a profit on the money you would have paid to Uncle Sam in the year of the sale instead of a 1031 exchange. This strategy is gaining popularity among those who have highly appreciated assets that will be marketed for sale or business owners. You too can potentially take advantage of this opportunity once you understand how it works.

The process starts with initial due diligence. If the transaction is viable, the trust and property owner will negotiate to reach terms with regard to the asset(s). Then the property owner sells their property to a trust owned by a third party company. The trust sells the property and pays you per the contract terms, making payments to you over an agreed upon period of time. There are typically minimal taxes to the trust on the sale since the trust purchased the property from you for the price it anticipates it can be sold for. The payment is made with an installment contract which makes payments to you over an agreed period of time.

The options on when and how payments can be made are flexible. You may have other income and don’t need the payments right away. The tax code doesn’t require payment of the capital gains tax until you start receiving installment payments. The capital gains tax is paid to the IRS with an “installment plan” since only that portion of capital gains tax is due in proportion to the number of years established in the term of the installment agreement.

Capital Gains Tax Solutions was launched to give flexibility and options to all real estate and business owners (and now bitcoin or other virtual currencies owners) who want to sell but also want to defer the capital gains taxes. The deferred sales trust eliminates the need for a 1031 exchange since the primary need is to defer capital gains taxes. It also allows an investor to buy back into real estate at their own timing. My goal in buying real estate has always been to buy low and sell high and the DST gives this option. The funds can also be invested in stock, REITS, bonds and mutual funds for those who want to be rid of the toilets, trash and day to day management responsibilities.

HOW MUCH CAN I DEFER IN TAXES USING THE DEFERRED SALES TRUST?

For a FREE tax savings analysis on a commercial or investment property, or a business you own, please go to mydstplan.com/taxsolutions and complete the request for analysis form.

Most investors, real estate or business owners struggle with capital gains tax when they sell their assets. We use a deferred sales trust to help them gain tax deferral, freedom, liquidity and diversification with their funds so they can create and preserve more wealth.  

 

By Brett

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