Is the Deferred Sales Trust Too Good To Be True? | Reef Point LLC.jpg

Is the Deferred Sales Trust Too Good To Be True?

Sellers of highly appreciated assets including owners of real property and businesses are keenly aware of the tax ramifications of selling their assets.  People will choose to sell their businesses or property for many reasons, including health reasons, lifestyle choices, a desire to be free of the time and other commitments required to manage such assets.  Many owners are reluctant to sell their appreciated assets because of the tax burdens they may face, even when doing so is at odds with the goals they desire and could achieve by selling.

How Your DST Investments Can Help the Community | Reef Point LLC

How Your DST Investments Can Help the Community

The current economic, political and social climate has a lot of us feeling like humanity is about to fall off the edge of the world. Okay, that’s overstating it a little. But still, the CDC predicts new COVID-19 cases could hit at least a dozen states hard in the next four weeks. Governments are scaling down or halting reopening phases. The New York Times reports that long-term unemployment projections remain grim.

Use a Deferred Sales Trust to Work Around 1031 Exchange Limitations | Reef Point, LLC

Use a Deferred Sales Trust to Work Around 1031 Exchange Limitations

An IRS 1031 exchange is a fantastic tool for an investor to transfer a real estate asset into another without recognizing a taxable capital gain. However, there are limitations of its use and strict rules governing its use: like-kind limitations, time windows and asset type restrictions. If you wish to diversify your real estate asset into other investments or if your asset is not real property to begin with, then you need a 1031 exchange alternative like a Deferred Sales Trust.

1031 Exchanges Threatened as Commercial Lenders Halt Loan Applications – Deferred Sales Trusts the Solution

The New York Real Estate News reported that the marketplace where lenders sell mortgages on office buildings, rental properties and other types of commercial real estate has ground to a halt as traders try to figure out how to price in risk amid the COVID-19 pandemic. Possible Impact to Real Estate 1031 Exchanges We are …

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How are DST Funds Protected?

In previous articles, we have discussed how the Deferred Sales Trust (DST) is a specialized form of Installment Sale under IRC 453.  Under an installment sale to a DST Trust, the entire course of the transaction and its continued operation revolves around a secured installment note in favor of the Seller. The term ‘secured’ means …

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How Do You Structure Repayment Terms for a Deferred Sales Trust Installment Note

Generally, the terms of note will be Seller driven and the resulting terms must be reasonable and commercially viable.  The initial term we would offer would be anywhere from 1 year to 10 years… Seller picks their desired term.    The payback structure is very flexible in that the seller could:  defer receiving payments for up …

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Bifurcated Exchanges into a 1031 Exchange and a Deferred Sales Trust

Bifurcated Exchanges into a 1031 Exchange and a Deferred Sales Trust with the possible use of a Delaware Statutory Trust for the 1031 Exchange Upside Replacement Property The usual 1031 jargon is “up in value, up in loans”.   In a bifurcated 1031 exchange you are doing 2 transactions-  (1) a 1031 exchange and (2) a …

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Can the Deferred Sales Trust Help Partners Wind Up Their Partnership in Real Estate Ownership?

It is not uncommon for friends or family members to pool their resources together to invest in Real Estate.  Often times they employ a strategy where they systematically use a vehicle known as a 1031 exchange to reinvest in more valuable properties using tax deferral to allow their assets to grow more quickly. As with …

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