Selling Crypto Currency and Deferring Capital Gains Tax with Hunter Thompson & Brett

Selling Crypto Currency and Deferring Capital Gains Tax with Hunter Thompson & Brett

Having a background in economics has allowed Hunter to achieve a holistic approach to analyzing real estate data and has led me to a unique perspective on out-of-state investing. The goal of his business is to help clients invest in passive cash flow opportunities that provide a healthy return on investment, without the headaches associated with the stock market’s volatility. 

He analyzed and closed residential real estate acquisitions, hard money loans, bridge financing opportunities, commercial and residential syndications, mobile home parks, retail opportunities, and syndicated office space investments. He worked with multiple asset teams across several geographic locations in the US and Canada. His main priority is establishing an extremely diverse portfolio without exposing the client’s capital to unnecessary risk.

 

 

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Selling Crypto Currency and Deferring Capital Gains Tax with Hunter Thompson & Brett

 

 

Brett:

I’m excited about our next guest. He’s a repeat guest. He’s an expert when it comes to commercial real estate syndication as well as an expert, and we’ll let him define his crypto experience. But we’re going to be talking all things Deferred Sales Trust, cryptocurrency and investment, real estate, and just kind of dissecting what this can and cannot do for you, please welcome to show the Hunter Thompson. Hunter, how are you doing?

Hunter:

I’m doing well. And I’ll just provide some context, I know you’re probably going to do this as well. But I kind of reached out to you said, we have to have a call on this. Because it’s starting to click for me, I am going to ask you a bunch of questions. And I’m just going to be myself. For those that don’t know me, I am kind of the capital-raising guy. I’ve written a book called Raising Capital for Real Estate hit number one on Amazon, I’ve raised $50 million from accredited investors, not institutions or family offices, but hundreds of people all over the country. We do this in an automated manner. We have a webinar about if you’re interested in checking it out, you can go to raisingcapitalforrealestate.com/never-scramble. And that’s all I want to do. That’s all the talking I want to do. Now, we’re just going to ask the man about this cool tool. And one more little piece of the intro. And what I said offline, which is really important is that in the world of finance in particular, anytime there’s like a new tool, it’s mostly not real. It’s usually not, right. So someone says, Hey, we got this new insurance product that’s going to save you all this money. And you got to do this and this and this, you give me a bunch of money. And later you make money. No, it’s usually not right, because it’s all the tools have basically been uncovered at this stage of the game. We have a very mature market. We all have access to podcasts, though. However, this is one of the few tools that as I’m starting to learn more about this, I’m recognizing this is a completely blue ocean, a very immature space. And it’s so good that a lot of people like myself that are fairly knowledgeable about these topics, go this is probably not real or not legal or hasn’t been really put through the court system. All that is not true. Now, that’s the last thing I’m going to say. And I’m going to ask you a bunch of questions because I’m interested in the topic.

 

Selling Crypto Currency and Deferring Capital Gains Tax with Hunter Thompson & Brett

 

Brett:

Perfect Hunter. Let’s go ready.

Hunter:

And this is going to be very casual. I’m not going to be in my hunter speaking mode like I typically am but so I, I’ll tell you a quick crypto story, which is kind of very limited. I did what most people do when they have crypto in 2017 kind of lose your account, you forget your password, you have to go back and reset them, etc. Anyway, long story short, this is probably the most irresponsible thing I’ve ever said publicly, I ended up finding a Bitcoin. I found a Bitcoin in an account. Now, in all fairness, the time I forgot about Bitcoin, it was worth $3,000 but and I was just like, I’ll move on with my life. Maybe it’ll come back later, I forgot that it existed. And I recently logged in and found a Bitcoin. So that’s not the reason I actually ended up reaching out to you. But it triggered something because so many people are going through something similar, where the crypto thing has come back with such vengeance, and they’re trying to figure out, oh my gosh, it was it made sense for me to have 3% of my portfolio in crypto, and now it’s like 100% or 98% or whatever. And I need to just intensify. So I have a similar situation in a startup and maybe to startups where I invested, you know, a relatively small amount of money in terms of real estate investments, but it’s probably going to be somewhere at 10x 20x. And now it’s really consequential and so the reason I reached out to you is it’s similar to what most people are going through with crypto where I need to figure out a way to turn that into cash flow assets etc. So that’s my situation that by the way that one of the companies is Thrive Market. I invested with them before they had a website and now they’re like a billion-dollar company. It’s a great company but that’s the situation.

Brett:

By the way, my goal to have this kind of open discussion with Hunter just so you know, is we want transparency as much as you can and we really want to help you kind of demystify kind of everything hunter said about the legality, the background what it is what it’s not like, just have a conversation and so with hunters approval, he said Yeah, let’s do it because there are so many folks out there whether you’re a CPA, whether you’re a commercial estate, syndicator operator, cryptocurrency investor luxury realtor like you’re very skeptical and you should be like understand because most new things are things that you hear for the first time are too good to be true. And but we’re going to talk about the track record and answer his questions and continue to show with evidence what we’ve closed. And so with that being said, passing up back to Hunter, what is your first question or thought or topic you want to dive into?

Hunter:

Okay. So my understanding is that I can create a trust, transfer the assets to the trust, functionally sell the assets, even though I’m not, I guess technically doing the one selling it, you have a trustee managing that, as long as you don’t receive the gains personally, you can keep the assets in the trust. First of all, is that a fair summary? Maybe the some of the nuances exactly,

Brett:

Exactly, you actually nailed on the head. But let me just do some clarifying pieces in between there. So what you’re doing is you’re lending the funds to the trust. And so we’re actually doing a cryptocurrency deal right now. And by the theory, for 100,000, it’s worth about 12 million, we intake the first 5 million and he’s going to transfer it from his Kraken account to the newly formed trust account. But he’s not going to exchange it, he’s not going to have that other account payment, anything. In fact, it’s going to be just a direct transfer. Kind of like if you were to transfer funds to a Qualified Intermediary if you’re doing a 1031 exchange, kind of like that, kind of like if you were to put funds into an IRA, kind of like you put funds into a 401k. The difference here is it’s not a continuity structure, where you’re, you’re selling something and moving into another thing you’re owning, it’s an exit plan, we are literally exiting your position in exchange for a promissory note and becoming the lender. So in this scenario, he’ll be owed back the 5 million-plus rate of return, but he hasn’t received any of the 5 million. So, therefore, it’s in a deferral state, kind of like an IRA, or 401k.

Hunter:

I actually did not know that. So that makes sense. So basically, you’re transferring the assets to the trust, but the more appropriate way to sit is that you’re lending the assets of the trust. Is that fair? And the trust can pay you back. And when you do receive those payments, you are going to be Taxed at Capital, or I guess, the income level at that point.

Brett:

Where Tax Deferral, not tax avoidance. This is very important. This is why the IRS looks at this, it’s IRC 453, based upon 90-year-old tax law, which is an installment sale. So you’re saying, look, IRS I owe tax liability on that $5 million, right? Let’s say in this scenario, it’s two. I know I owe that to the government says Yes, thank you, Hunter, for showing that you owe that to us. And but as you receive payments, if it’s interest payments, you’ll pay ordinary income tax on those interests of the 5 million, you dip into principle, you pay capital gains tax. But here’s the kicker, that 2 million that you owe the government, it’s at a zero interest rate. So the question is when would you like to pay 0% interest back to the government answers all answers for you are never right? You want to keep that in a deferral state. Now you eventually will pay it and you’ll pay the ordinary income tax. So it’s not like we’re never gonna pay tax. It’s just like a 401k or 1031, or an IRA. When do you pay tax on that? Well, when do we start receiving payments? Well, when you start receiving payments, and this is the key, when is it worked for you a lot of our clients will delay for a couple of years, especially if their income is high. And in the meantime, they can use the funds, they can go back into active or passive real estate deals, or stocks, bonds, and mutual funds, or hard money lending, right? We can diversify the equity into multiple things. So it’s perfect for the cryptocurrency person, right? Who’s hit the home run lottery on Ethereum or whatever. They sell, diversify and get some cash flow going.

Hunter:

Okay. So in my situation, selling the interest in the startup, which I’ll probably likely do for both of them at some point, I would likely want to then take those proceeds and invest them in, in either both assets that I owned directly, like securities or syndications, in which I’m a GP owner or passive syndications. Yes. And both of those are appropriate so far.

Brett:

Absolutely. As long as it fits your risk tolerance questionnaire. So let’s talk about the mathematical aspect of this before the funds go anywhere Hunter, you would fill out a risk tolerance questionnaire, this is no wrong answer to this two-page questionnaire, what’s your level of risk tolerance? What’s your level of experience with different investments? What is the order your income needs? Will you know how soon could you need or want all the money? All of those things now that a score is determined based upon how you answer mathematically and then an interest rate is assigned, okay? Typically about 8% compounding net of all recurring fees over a 10 year period of time, that’s where most of our clients hit. And at this point, you can be completely passive and say, hey, someone else could do this for me, whether that be another commercial estate operator stocks, bonds, mutual funds, right? But in your scenario, you’re like, no, I like to be active and make a lot of wealth and I know how to do that. That’s why it was why I do what I do right, up to 80% on the 5 million, about 4 million The next day, could go into an LLC and could invest alongside you into your fund real estate fund or your next real estate deal, right? That’s just an interest in LP with you and that deal, right as a Silent Investor and this is the way we structure this. So, you hunter form an LLC, which you’re the managing member of, and you’re looking for a partner, you’re looking around and you find this, this trust over here that 4 million silently goes into that. And this LLC structure is at 20 to set up 80% a hunter, even though hunter puts up a zero down payment, the trust puts up 100% of the down payment. Okay, 1 million in exchange for 20% interest in an 8% pref. Okay, now realize we got to pay the trust back, which is like a circle, which turns around pays you anyways, that 8% right? So it’s, it’s kind of like borrowing from yourself, but you’re not borrowing for yourself, because if you were borrowing from yourself, it’d be taxable 100. So we got to follow the guidelines and the rules. So it’s a little bit a JV joint partnership, LLC. Now what’s is there in that LLC? Can you put it into your fund? Yes. Can you put into your own other deals? Yeah, just like you would on any other dealer you have LLC, is that investment into your fund or LLC is and invest into your syndications. So that’s how that works. Note to why 80 20 well, we need some liquidity. Okay, so why what is the other million go? Well, the other million Nice, nice stay liquid, where’s that? The biggest companies? Well, S&P 500. Okay, you have to improve those investments. Those are managed by third-party financial advisors. He’s my business partner, a co-founder who started this all okay, he would manage the funds there, again, based upon your risk tolerance based upon your approval. Okay, so we’re all working as a team here. And we’re trying to diversify. Now, do we want to put all 80% into, into something that’s really, really highly risky, maybe maybe not right, depending on your risk tolerance, but we might put 30%, and very, very high-risk stuff and another 20% and stuff that’s, you know, bread and butter for what you’ve always done. So we’re gonna, we’re gonna massage and look at that and come to come to an assessment based upon your risk tolerance. So it’s not unilateral control, but it’s dual control, meaning you have to approve the investments. But if the risk tolerance is often is too risky for the trust, as the trustee, by the way, that’s my role, we got to say, well, honey, remember your risk tolerance questionnaire. So we got to cast some checks and balances here, that’s important to understand. Whereas if you were a complete owner of all this, right, you don’t have to answer to anybody in this scenario, you do have to answer to the trust documents and the promissory note, and the risk tolerance questionnaire.

Hunter:

Which to a large degree, you create a no mean, you I mean, the person that’s involved in the transaction, the person me in this case. And then in terms of transacting, I mean, the thing that came to mind why I wanted to reach out with you, as its I’m a little surprised that this is not done, perhaps it is, but not talked about more is like, why aren’t like, say hedge funds doing this? Because that’s what they’re always trying to do, like active traders, for example, my understanding of what you just outlined would be that you could then constantly actively trade without incurring any tax whatsoever on a per year basis, like you can defer a tax but you can create a fund and basically trade in and out with whatever you wanted to do. And then always defer, defer. Are they doing that? Or why would that be prohibited?

 

Selling Crypto Currency and Deferring Capital Gains Tax with Hunter Thompson & Brett

Selling Crypto Currency and Deferring Capital Gains Tax: Innovations are very cruel by nature. They destroy the old ones to create space for themselves.” – Sukant Ratnakar

 

Brett:

Good question. So let’s talk about the transaction minimums and the actual team it takes to execute this. So first of all, our minimum deal size is 1 million net proceeds and at least $1 million gain, found that because of the pain the tax has to be big enough in order to pay off our fees. First thing, so we typically like if, like, I had a guy call me today, and he like, I have 30 LP positions, and they’re all collectively worth 4 million. I’m like, that’s not a deal for us. So you should go into an opportunity zone. Because it’s his brain surgery to sometimes with that many deals all wants to do this. Now, if he had four deals worth 4 million, that’s great. We can sell each particular deal crypto, business, commercial real estate, LP position, GP position, and roll it into one trust, that’s fine. But, we have to execute this because you’re literally are creating a transaction. It’s not like just setting up an LLC and just transferring it as it takes the legal work takes it takes the legal setup, it takes individual trust. So that hopefully is a part of the answer. The second part of the answer is short-term versus long-term. Right? So if there if they’re doing like day trading ideas are typically short-term. Yes. Although we do have a solution for that I’m working with another guy. He’s actually a Texas he’s he’s been sold like 4000 houses and a lot of small deals. And he said, Well, can I just keep selling all I’m like, well, what’s the size? your deal? The average was 150,000 bucks. Okay, well, that’s not great either. Because of our transaction cost, it’s always this high. So it’s, it’s a give and takes. Now I said if you pull all those houses together and sell it to one big buyer for 15 or 20 million bucks, that works. Because the transaction meets the tax liability and the deal. So that’s kind of the answer. Hopefully, that answers the question under more questions on that. 

Hunter:

No, they’re the I understand, there’s basically some stipulations around number one, the frequency of the trades number two, the volume of the dollars that we’re talking about to make them make sense from a fee standpoint and exactly

Brett:

what we can do short term just say no, we do have a structure where we can actually do short term, but it needs to be a very big deal and it moves it outside the taxable state, and it has a little less flexibility. So just keep that in mind. But we typically save that for 2345 $10 million deals, or greater, but it works. It does work for the short term, but most of our deals are going to be 5 million and below using the traditional deferred sales trust, based upon the client’s needs and wants. So

Hunter:

okay, and the other really important metrics there is that this starts to make sense, at least from your business plan, like your company, etc. When someone has a million dollars of gains, they’re trying to defer.

Brett:

per transaction. Now they have to at 500, it’s good. But it also tends to make sense for you as well. It’s got to be a win-win for all parties. We found when we did we’ve done some smaller deals and the pain is like I did a deal. It was like a $700,000 deal. But the pain was only like 110. Like it wasn’t any pain. That’s what the cane, that’s if liability was that’s what the difference in the gain, right? liabilities determine a basically 30 to 50%. If Biden passes, the proposal is gonna be exactly 80%. So at the time, hers is like 110. And she’s been a client, and I call that like a base hit like it’s a solid base hit, it’s not really a double or triple or home run. And I just found that when we’re interacting, like, it depends on big enough for this particular client to like warrant like, well, what are the fees, and the fees are about one and a half percent to set up a one and a half ongoing? And like, it’s just like, it’s like, what are you providing for me if the pain is not big now if the pain is three, four, or 500,000 of liability? They’re like homerun are only charging one and a half. Fantastic. That makes sense.

Hunter:

Yeah. So it’s crazy. Because another reason that you’re getting so much attention right now, it’s very well deserved. If you’re listening to this or watching this, you’ve been doing a very good job of bringing this to light. And from a marketing standpoint, I don’t really know much, many people that are just being like, I’m gonna be the deferred sales trust guy. And that’s just a very good position as in my intro, I said on the raising capital guy, there’s a reason now we’re best friends. We’re not competitors, but there’s just a complete opportunity for us to do anyway. So that’s awesome. 

Brett:

Thank you, Sir.

Hunter:

So let’s think about this. So the million-dollar gain thing is definitely important. Would that be let’s say I had a stock portfolio that had like 30 stocks, cumulatively there was like a million dollars of exposure. Can you tie that up into one transaction?

Brett:

No, the same thing. So we can’t do public or private stock but, but like, give me give you an example, though, this is really cool. We were working with a startup gal who started like three years ago at the company and the stock went from $2, a share to $250 a share. Okay, and she has about $5 million of publicly traded stock, and we’re going to help her defer it. And she doesn’t, she never has to work again, which is part of the passion of what we want to do here. What hunter and I and other commercial syndicators are creating opportunities for people to get passive and to behave time energy freedom, right and not have to work the corporate jobs. So that’s the transformation. All of these are different tools, real estate investing, right? deferred sales trust is the tax part that kind of helps you to can get there at all tax-deferred, but the key is the freedom that it provides and transformation for clients and for individuals and family. So it’s a little plug there. But yeah, public stock, but again, gotta be at least a million more. Now, if you have to at $500,000. Yeah, we can do that. But that’s kind of where it stops.

Hunter:

Okay. Got it. Thinking about this? Okay, so is there any other kind of so just to circle back regarding the kind of statements about IRAs, so you can get in some challenges, if you have like a 401k, that’s going to invest in the deal that you’re the GP on, like, if you’re an LP investor, you can’t have your 401k invest? Some would even make the argument that you shouldn’t invest alongside your 401k as an LP investor, but you certainly shouldn’t invest your 401k money into LP interest in a deal that you’re the GP on because there’s the self-dealing thing. Would that be a part of this at all? 

Brett:

Zero, that’s the beauty of ours, we’re more flexible, there are no minimum required distributions. There’s no problem. You know, during the LLC LP, you’d need to go from the trust directly into an LP passive position, or we would form that LLC in partnership and as your if you’re a general partner, or you’re running that fun, right. So it’s, it’s a mix, and there are no problems there. We’re not a retirement account. We’re just an installment sale. Hide to a lot of that extra 401k IRA, regulations if that makes sense.

Hunter:

Got it. And just to circle back on the fees you mentioned, it’s close to one and a half percent upfront fee.

Brett:

One time and then an ongoing one and a half. So let’s say it’s a million-dollar gross sales price. It’s like 18,001 time that covers lifetime audit defense. Those are my business partners, the tax attorneys. Okay, perfect track record. 25-year track record. 1000s of closes billions under management faced the About 15 times, it’s never all no change audits. It’s been on never been on a promoter list never been on, like a dirty dozen list they call it. And also, yeah, they provide lifetime audit, defense, state or federal, they will cover no additional charge should you be audited. So that’s the tax attorney part. The second part would be me and my business partner for a financial advisor, it’s about one and a half percent the of the ATM. So if it’s a million bucks, it hits the account. It’s about 15,000 on a recurring basis, charged upfront, some of its charges as the funds go, no matter how, where the funds are invested, whether it be your own GP deal, or a passive real estate deal, or all of it in the stock market. It’s about one and a half percent. But the goal net of the recurring fees at the end of 10 years is to get you 8% compounding, which is pretty good.

Hunter:

But that’s really the real goal is to compound the assets in the trust.

Brett:

Yes, in two ways, right. So the first way is to pay you the eight. But the better way is to take that LLC, and this is where you’re going to like this hunter and people miss this piece here. So remember, when, when you were an IRC 453 deferred sales trust, we don’t have any timing restrictions, right. So we have none of the 1031 requirements of equal or greater value, or timing restriction. So we can put into the trust and sit on the sidelines and wait for the right opportunity. Now, if you are an active GP, right, in a deal, you can partner with your trust. And we form that LLC, and we can give you up to 98% of the upside of that deal. So let’s walk through that. So you close a $10 million deal, you would have paid 4 million attacks, you put 10 million into the trust, 8 million the next day goes to an LLC, and you buy, let’s say a $20 million apartment complex. Okay, now you hunter put zero into that LLC, the trust put of all of the downpayment as a silent partner, okay? But you hunter have 80%, owners of the LLC day one cool with an option to carve out up to 98% upside of that $20 million deal. So let’s say you add value, it turns into 30 million you sell it five years later, you can carve out the upside from the trust and get 90% of the upside. So the end result would be hunter put zero in but get 98% of the upside right from 20 to 30 million after he paid back the preferred return on the 8 million which the trust put. And the trust, we get the 2% upside. So that’s like the secret sauce. And once you actually get that and like get the boxes and go through the three options agreements, and look at that, that changes the game forever. Because not only do you hopefully buy that property at 20, instead of buying it, let’s say at 24 and 1031. Exchange, a year prior. But second, you have a brand new depreciation schedule. One of the number one reasons to own investment real estate is for the depreciation to offset the cash flow. But guess what, in a 1031 exchange, your depreciation schedule travels. The second part is after 27 and a half years your depreciation depletes the zero, right? So the intent is to get a brand new depreciation schedule the challenge 1031 is the blockbuster way of doing it. You have an old depreciation schedule, the Netflix deferred sales trust, we sell we get a brand new one, we rinse wash, repeat. So you’ve covered you catch all that 100 you want me to repeat?

Hunter:

That’s all great. I mean, I certainly caught it. If you’re not super familiar with the language, maybe it’s a good time to go back and re-listen. But that’s, that’s all really good. So when is the timeline for this? So like, let’s say that you have someone that’s trying to liquidate something in 30 days, is that too late? How does it look on your end?

Brett:

Um, so it depends on the sophistication of the client be it where the contract has contingencies removed or not. So let’s first start with non-investment property. Okay, non-1031 qualified property. So that would be cryptocurrency, that would be a business sale, that would be a primary home artwork, collectibles. We need to have the trust actually formed and actually inserted into the purchase and sale agreement be an addendum, basically, you’re assigning your rights to the trust, you have an option to do that you’re not obligated. So if someone calls me today’s is 30 days on closing, I’m kind of considering it, no-cost, no-obligation, let’s set up the trust, let’s get it formed, it only does business with you, let’s put it into the contract, then you have another you know, let’s say 29 days to do your due diligence, then you can exercise that option to move the funds into the trust. If for some reason you don’t use the trust or the deal doesn’t close, you don’t owe anyone anything. So we take all that pressure off. However, if you call us the day, after all, continues to have been removed, or you say I’m so sorry like it’s too late. We cannot use the deferred sales trust Why? It’s basically the part of what’s called constructive receipt that you basically construct to receive those funds, even though it hasn’t technically closed. So so that’s why we can do it. Now. Let’s go back to the 1031 way. So the deferred sales trust can save a failed 1031 exchange. In fact, we’ve saved three deals in the last 40 days out of seven deals that we closed, okay. How we do that is we set up the trust once the funds are at the Qualified Intermediary and instead of sending it to their personal account, we send the funds to that So we’re maintaining non-actual or constructive receipt. But that only works for investment property. Now, some clients want to close the trust immediately at close on an investment property, which we can do right there, or basically day 46, or basically day 181. Now, you want to not every Qualified Intermediary work, and allows or knows about this. So we do have the preferred strategic alliances that we want to make sure you’re in touch with. So you know, and it’s very seamless. But hopefully, that answers the question on that.

Hunter:

Yeah, it does. 100%. So can I just do a quick summary because I have to run in just a second? This was exactly what I was hoping for, by the way. So I appreciate it. lets you have a million dollars of gains. We say, Okay, look, let’s set up, let’s set up this trust, we can do it pretty quickly. It’ll allow you to transfer the assets to the trust. At that point, you have a trustee, which everything has to be accepted by both the trustee and the person. I’m assuming you have some security in place regarding the trustee he can and can’t move things done certain manners

Brett:

100%, wee a bank account actually is called Deposit Account Control game, it’s a bank in Southern California $16 billion, I can’t push the red button. I’m the trustee, you physically have to sign for I have to sign for it. They have to review it, and then the bank pushes the button to go to the next investment. So it’s all protected.

Hunter:

Very cool, that’s actually a really important point. Because I know that there’s probably a lot of people listening to this and are looking for the scam because it’s, they’re trying to figure out why they haven’t done this already, basically, and weather so that’s a really important one. It’s similar in the hedge fund space to a managed account where the person can go in and make trades, for example, it’s a metaphor. So it’s not exact, but people can make trades, but they can’t send money in and out, they can only make money.

Brett:

Yeah, I can’t log in and push the button. I can only send you a paper to sign. And a lot of times, the bank will even email you to confirm or call you to find out the formula is going out Hunter, you saw it. Yeah, that’s my signature, and they match it up to physical signature, right, and then they send the funds.

Hunter:

Okay, so you got the million dollars of gains you transfer to the trust, you can then sell the assets. And you have to at that point, you can have cash in this trust, you would then take a minimum of 20% and put it into liquid assets as in the top tier blue chip type of companies, s&p 500, etc. The 80%, that’s remaining, you’re basically allowed to invest it however you see fit. And obviously, the trustee to some degree has some kind of input in either, you know, the transactions, etc. But you can invest in anything, including deals in which your general partner? Yes, the 8% is that required distribution to you that

Brett:

you can delay distribution like I have a client, we just did a $2.6 million on Alabama, and he’s in his 40s. And he’s making like a million a year in his income. So he doesn’t want I to need the income so we can do income tax deferral, you’re delaying payments from the trust. Now the 8% is compounding and build Yes, what’s owed to him? Yeah, but he’s not having to make distributions to him until a future date.

Hunter:

So look, if you’re gonna go through all of this, I mean, that’s what I would suggest you do. This is like golden Monday. Now. It’s basically you’re in the Promised Land of everyone, what everyone wants to do all the nonsense people go through for dealing with self-directed retirement accounts, you’ve basically created one, so you just don’t take those distributions. If you’re in a position where you have $5 million of aetherial, for example, figure out a way to make enough money is enough to take the money out. Okay, um, last structural question, and I really do have to run this has been very, very helpful, by the way. I also like working with you, because I have to always listen to my podcasts at like, 3x speed. And this, we don’t have to do that on this one. So I’m sure there are people. So one other question though, let’s have syndication where I’m a GP owner of syndication there are 50 investors in 1031. We have to go through and everybody has to agree has to be unanimous, etc. Can I? Can you do that as a GP owner of syndication? How does it look?

Brett:

Yep, absolutely called a seamless partnership separation. Remember, in the 1031 exchange, the whole entity must move typically at all 100% approval, which is a mess, right? And the deferred sales trust, we just closed two deals for to GPS, Dave and Jordan, you can hear their story, they sold a $20 million asset in Las Vegas, and they had a ton of LPs. They just took their money back they normally way and they pay their tax. But each of their GP positions, Dave and Jordans went into their own individual deferred sales trust accounts, then they did it for a second deal $60 million deal on Phoenix, and that those funds rolled into the same trust account. And this is the cool part. They bought a deal in Dallas and parched part of the funds went into that the active GP deal. So yes, 100% you can do that. It’s one of the best-kept secrets of the deferred sales trust.

Hunter:

Okay, and the 50 investors, have an opportunity to participate in this or

Brett:

if their deal was a million dollars or more and a lot of the investors that will obviously we work with are 50 100 200 right? And that’s not enough gain. So but yes, if they had that, then they could do their own LP 12.

Hunter:

Dude, you killed it. You answered all my questions. I appreciate it. We’re gonna be in touch real soon, Man.

Brett:

Thank you and for our listeners, go to Capital Gains Tax Solutions Podcast, our capitalgainstaxsolutions.com. You can also search on iTunes and Youtube the podcast, and please rate review, subscribe we appreciate everybody thanks very bye now.

 

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About Hunter Thompson

Selling Crypto Currency and Deferring Capital Gains Tax with Hunter Thompson & Brett

Having a background in economics has allowed him to achieve a holistic approach to analyzing real estate data and has led me to a unique perspective on out-of-state investing. The goal of his business is to help clients invest in passive cash flow opportunities that provide a healthy return on investment, without the headaches associated with the stock market’s volatility. He has analyzed and closed residential real estate acquisitions, hard money loans, bridge financing opportunities, commercial and residential syndications, mobile home parks, retail opportunities, and syndicated office space investments. He has worked with multiple asset teams across several geographic locations in the US and Canada. His main priority is establishing an extremely diverse portfolio without exposing the client’s capital to unnecessary risk.

 

 

 

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