Deferred sales trusts have been around for a while, yet many property owners with high-value assets are still reluctant to take advantage of them. As tax strategists and financial advisors often have differing opinions, you might hear competing perspectives about whether a DST is legal and beneficial. We want to set the record straight so you have the necessary information to determine whether a DST is right for you.
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Tax Planning Strategies for Personal, Estate and Business Income in 2023
2023 is already well underway, but it isn’t too late to start planning ways to minimize your tax obligations for the year. It pays to scrutinize your income streams to determine where you can make adjustments that ultimately reduce your Internal Revenue Service bill next April. We suggest personal, estate and business income strategies so that you can cover your bases, no matter your situation.
What You Need To Know About a Deferred Sales Trust
A Deferred Sales Trust is an innovative legal tax strategy that allows you to defer capital gains taxes on selling highly appreciated assets. It’s growing faster than any other tax mitigation strategy in the U.S. If you plan to sell a business, real estate investment or cryptocurrency, you will likely face substantial capital gains taxes on your federal returns. A DST can help you avoid paying capital gains taxes immediately and save you money in the long run.
Important Tax Deadlines To Keep in Mind
Every year, the Internal Revenue Service chooses a date at the end of January to mark the beginning of tax filing season. In 2023, that date was Monday, January 23rd. The traditional filing deadline is April 15th, but weekends and holidays alter the date. You have until April 18, 2023, to e-file or mail your taxes. However, those two dates are not the only significant dates you need to know about.
IRC 453 Installment Sales: Can the DST still work if the Seller is doing a Seller Carry-Back note directly with the Ultimate Buyer? Part 2 of 2
Yes, the seller may incorporate both a Deferred Sales Trust and a direct seller carry-back with the ultimate buyer. Both techniques are governed by the same IRS Code (IRC 453) and both allow the Seller to defer taxes until periodic installment payments are actually received.