Part 4: One Thing To Focus On For Your Bitcoin Deferred Sales Trust Transaction
Hello everybody welcome to Part f4 of selling your Bitcoin number one thing to focus on when selling your Bitcoin for your Deferred Sales Trust transaction. I’m your host here or the video expert here on YouTube, Brett Swarts. I’m focusing on helping you make all things simple the Deferred Sales Trust, and all things simple when Deferring Capital Gains Tax on the sale of your Bitcoin or Ethereum, or other Highly Appreciated Asset, Business or Real estate. We are on Part 4 of our series investing and ongoing management of the Deferred Sales Trust. There’s Part 1, 2, and 3 if you haven’t checked those out yet. I’m going to cover it real fast on order here. But we dive into the detailed Part 1 is all about the Strategy and Motivation behind selling your Bitcoin. We encourage you to have a clear plan for why you’re selling and hopefully a clear outcome for what that investment on the next deal that cash flow can do for you, or for retirement or for the next business venture and its real estate deal. Have a clear plan on the overall Macro Strategy, and then get very clear on what that outcome can be for you. That’s all in Part 1 of the video. Part 2 is all about the Deferred Sales Trust Team, who are these people that are helping me? What are the roles, the GST tax, turning the DST Trustee, which is us a Capital Gains Tax Solutions, the Financial Advisor, how we work with your business team, and professionals to help you execute on this. Part 3 is all about Executing the Deferred Sales Trust and actually open up the exchange accounts at places like Kraken, open up the DST, the transfer of that how that kind of looks, the security of that how to do that in real-time. Check out Part 3.
Then Part 4 is right now the Investing in Ongoing Management, and as I was making last videos thinking, You know what, I should talk about costs. Because people are wondering what are the fees, it’s one of the most commonly asked questions. I’m going to cover that first was a little bonus here, and as we dive into the how and where the funds can be invested and the ongoing management of it. You might be picking up on the Deferred Sales Trust, it takes a team of professionals to execute on this. It’s not like just opening up an LLC and just transferring funds. It’s not like just opening up an IRA account and moving funds there. It takes ongoing management and an ongoing team, I want you to think of this like a Business Trust, which is a business trust. I want you to think if you like this CEO, and my role as a Trustee is kind of like the COO, and then there’s like the CFO. The CFO would be like the financial advisor, the COO would be like the Chief Operating Officer, the CEO, it’d be like the Executive who can make approval or disapproval of the movement of the entire business trust, and that regards to when fees are paid or approving the fees to be paid as well as approving of the investments to be made. With that, the costs are really just kind of two main costs, and then some miscellaneous costs. The first is the one-time setup fee to the tax attorneys. they’re kind of like, I call them like the business brain surgeons of this entire thing right there the legal arm that actually opens up the trust. They’re the ones who have faced the IRS over 25 years 1000s of closes and have had a no-change audit track record with the IRS. They’re batting 1000 there, and so everything’s legal, and it works as long as we follow the rules and parameters here with a third party trustee, which is me. They charge 1.5% typically on the gross sales price on the first million and then 1.25% on anything above.
Let’s say it was a million dollars of Cryptocurrency you want to sell tomorrow, they’re going to charge $15,000 only at the close. Remember, that’s a part of their conditional engagement agreement, or conditional fee agreement. Just like here at Capital Gains Tax Solutions, we don’t charge until the deal closes, they don’t charge until the deal closes, we’ve got 15,000. Now as a Trustee, we’re somewhere around with the Financial Advisor depending on who the financial advisor is. Depending on what they charge together, the financial advisor and the trustee, I like to say is no greater than 2% on a recurring basis per year. If it was a million dollars, it would be about $20,000 on a recurring basis on those accounts under management. If the number goes higher, that can go lower. But that’s typically the best way to just keep it simple right here right now. Our goal typically is to earn about 10% on the money to net about 8 on most of our deals based upon the risk tolerance. We help you score that risk tolerance, and that will determine the interest rate on the promissory note. That’s the fees, now there’s the trust also filed tax return as a bank fee miscellaneous fees that run around $3,000. That’s part of why we have the minimum of a million-dollar net proceeds million dollar gain so that there’s enough we have to say pain if there’s not enough pain, then our medicine here is is not going to be valuable enough. But if the pain or the tax is large enough then are the medicine of the Deferred Sales Trust is can be an absolute home run. We believe when it’s a million-dollar net proceeds a million dollar game. That gets the fees out of the way.
Now let’s talk about where and how the funds can be invested. This is where it gets, I think it is really exciting because I want you to focus right now on a thing called Optimal Timing. Optimal timing basically means this, “We Want To Sell High And Buy Low” whether that be Real Estate, whether that be Cryptocurrency, whether it stocks bonds mutual funds. We ideally want to be able to diversify, get some liquidity, obviously get tax free with the Deferred Sales Trust, that’s all on the planning. That’s all in the execution. But then once it closes, we want to go and be able to invest and make a return on the funds to be able to pay you back. As a team, the Financial Advisor, are presented with options and opportunities to invest in can also be real estate. It can also be businesses, and so that’s the ability to invest in different things. It could also be a cryptocurrency. There’s not like a set standard, except for, we need to make sure we keep some diversification and some liquidity. You must approve all investments, and so that’s, that’s the beauty. It’s also not like, the 45-day window to identify or 180 days to close if you’re familiar with the 1031 Exchange and trading real estate. We call it the blockbuster with Exit Planning. This is truly like the Netflix version where there are no timing restrictions on that.
In fact, I had clients that were very nervous during the COVID-19 2020 market, real estate wise, crypto wise, as well as investing in the stock market wise, they were very, very nervous. We sat in the bank, and we waited and we were patient until they believe optimal timing was there and feel comfortable with that. That’s the thing that we want to work with you to figure that out, and then so that’s how and where the funds can be invested. That’s the cost, and the ongoing part of it too. There’ll be a tax return filed once a year for the trust, and that’s part of what we do here Capital Gains Tax Solutions, and we have a team that does that, and you can review that tax return, you receive 1099 for any interest payments that were paid back to you. For example, if it’s a million-dollar deal, and it was set to pay back at 8%, and you received $80,000, you’d get 1099 for $80,000, and you would report that to your CPA, and you’d pay ordinary income tax on that. If you took a little bit more like $100,000 and earned 8% 80,000, that 20,000 you pay Capital Gains Tax on that you’d also pay that. Remember, this is tax deferral, and you’ll pay as you receive it, it’s unlike an IRA or 401k in that scenario, and that the funds are growing in a tax-deferred state until you start to receive it. That’s what to expect for yourself, and that’s kind of the ongoing part of this. Then there’s also monitoring, of course, you’ll have 24/7 access to the funds online for the investments that are made typically in a place like TD Ameritrade or Charles Schwab, and so that’s how that works, and then at the bank as well for funds that are sitting there waiting to be deployed into the next investment.
Hopefully, this helped you get some clarity on the number one thing to focus on for your Bitcoin or other cryptocurrency Deferred Sales Trust Transaction. If you want to take action and you’re ready to start your transaction, you can go to Capital Gains Tax Solutions. Remember, a minimum is $1 million net proceeds $1 million gain. If you don’t have that yet, now if you had to, it’s okay or to that equal that $500,000 each or 700,000, 300,000, then you can certainly qualify if you’re going to be selling those in a short period of time. But if you want to learn more about that you go to CapitalGainsTaxSolutions.com, you can download our Free eBook, but best of all, I think is the most amazing thing we’re offering right now as a Free Mastermind on all of this and where you can get with clients of mine and get with me personally, my business partners, Financial Advisors, CPAs people learning about it for the first time, we want to try to make this thing simple and I feel like you’re on an island doing this by yourself. We’re closing these every single week and we want to earn and when your business and but we want to try to clarify and keep it really simple for you by all hands on Mastermind Education. It’s every Friday at 10 am Pacific Standard Time, you can go to CapitalGainsTaxSolutions.com, it’s also 1 pm. Eastern Time. You can Join Our Mastermind and we look forward to hopefully seeing you there real soon. Please Rate, Review, and Subscribe. Please share this with somebody it could help and they could be selling a business a primary home, it could be selling of course cryptocurrency. It could be selling a commercial real estate property or looking for a way to save a failed 1031 Exchange. Please share this with them this way it could help them out, and we so appreciate everyone out there and we look forward to talking to you soon.
Closed Deal Story
Can I Save Capital Gains Tax When Selling Cryptocurrency? The answer is, “YES.”
Silicon Valley Technology Expert Finds A ‘Deferred Sales Trust’ To Break Open A Clear Path To Sell Cryptocurrency To Defer Capital Gains Tax
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.”
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Want to learn more? Check Out The Blogs Below!
- Can a Deferred Sales Trust Be Used for Mergers and Acquisitions?
- How to Defer Capital Gains Tax When Selling Your Cryptocurrencies
- Need An Exit Strategy? The Deferred Sales Trust Might Be the Answer