What Is The Deferred Sales Trust With David Young & Brett Swarts   “The only difference is here, rather […]



What Is The Deferred Sales Trust With David Young & Brett Swarts


“The only difference is here, rather than putting $1,000 in an IRA and then going out and buying some stock or some bonds, and then we start this whole journey. Here, you’re putting in something you already own.” – David Young



What is the Deferred Sales Trust? It seems too complicated right there. It’s too good to be true. We figured out that legal, it’s proven, it’s done. But the next thing is, but it’s just too complicated for me or my advisors to understand my counter to that, I’m curious what you think, David. Well, they haven’t done it yet or their clients haven’t done it until someone’s done it that they know, and kind of like your story. Where you said, you had the technical part of it, you had the practical part of it, and you had the application with your friend of yours. And you’re saying, all three, and that helps to solidify that. And you can’t also beat them up too much. Because sometimes they’re calling us with 30 days to go. This is a $10 million business sale, all of a sudden, they’re looked up, they’re like, “Oh my gosh, I’m gonna have a $4 million liability tax liability.” It’s such an emotional, big thing, and they go, I don’t understand everything over there. I’m just going to either not do it or acquiesce to what my CPA says, who has never seen it either. Just walk through and try to put us if you’re in their shoes. David right now, trying to take us out of it, being in the industry for 15 years or 30 years, take us out of it and help the client right now who’s looking at this and saying, I just don’t fully get it? How do I know I can trust that I’m gonna be okay.


So let’s see, I’m in Brett, I’ll ask you to chime in here a little bit too. We can kind of tag him in this one. It’s funny someone, at least in terms of conceptually compared and contrasted a free sales trust with either a basic IRA or a self-directed IRA, which are suffering, where someone might elect to purchase a piece of real estate in your IRA, which you can do, there’s such a thing as a real estate IRA. It’s just like the other one, except it’s buying real estate in there. And now, there’s a difference because it would be an initial purchase, or you’d be investing in something that hadn’t been appreciated yet. But if you forget about that part. What is it really? It’s simple, it’s an IRS tax code, just like 401k and the IRA tax codes? There’s a bunch of them. Which basically says that, if you’re investing money, or owning an asset, for these set of purposes, which we believe to be, good retirement, whatever the case might be.

There are some elements of kind of the tax code wanted to instead, the right kinds of behaviour. You open up this particular type of an account and it’s conforming, it’s kind of meet these different rules and regulations, that if you put an asset in there, you could buy one share of stock or whatever you put an asset in this instrument, it will grow tax-qualified. In that case, we say tax-deferred, until such time and there are some other conditions about age, which aren’t part of this. That’s because that’s a retirement, vehicle, whereby you can defer payment of taxes. When you turn a certain age or choose to take it out, there might be a penalty, if you take it. It’s really no different. It’s, it’s if you keep it super simple. The only difference is here, rather than putting $1,000 in an IRA and then going out and buying some stock or some bonds, and then we start this whole journey. Here, you’re putting in something you already own. Then there’s a note that comes back, you’re representing your ownership that’s a trustee overseeing it. It’s there are all these different parties who are in place to manage it and make sure it does what it’s supposed to do. It’s really fundamentally no different. When you boil it down to, its simplest, comparative wrapper, something like an IRA, which we’re most of us are very familiar with. I think he demystifies it.




Closed Deal Story


Selling Bitcoin, Ethereum Capital Gains Tax-Deferred Using the Deferred Sales Trust


I believe that is where we’re at with cryptocurrency’s current marketplace. We closed the first Bitcoin and Ethereum case for $5 million and helped the client defer around $1.5M in capital gains tax. Now we’re getting a wave of individuals who are finding us. You might be finding us right now.

One of the biggest challenges with folks who are selling cryptocurrency is they want to be able to diversify, they want to be able to time the real estate market and or even the crypto market, they want to be able to have some liquidity, some cash flow, and so part of this vision is taking helping our clients who are in cryptocurrency, buy an investment, real estate, all tax-deferred, using the Deferred Sales Trust, also invest with Jake Mellor as the financial advisor to in a diversified investment grade security or start a business. Whatever the outcome that you want to do. Why is it that you’re investing with any type of asset? What if you could sell high, diversify, and buy back in whenever you’d like to? This is what we’ve already done and we’re doing, we’ve already proven it.



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