With the possibility of capital gains tax rates increasing in the near future, you face a risk that, when you sell a highly appreciated asset, an even larger portion of your sale proceeds will be eaten up in long term capital gains taxes. The Deferred Sales Trust (DST) to the rescue! If you’re a savvy investor, you may have used this unique, proprietary tax deferral strategy in the past when you sold a piece of highly appreciated investment real estate.
In Part 1 of this series, we explained how you can use a bifurcated 1031 exchange and Deferred Sales Trust (DST) to meet your investment and financial goals. In Part 2, we now offer you an alternative to the bifurcation approach.
In Part 1, Charles and Maddie’s story illustrated how life and politics can make a father’s desire to provide for his daughter much harder than it should be. While not ultra-wealthy by any standard, Charles has enough retirement savings that he should be able to structure supplemental income for Maddie for many years should he succumb to heart disease complications or any other premature death.
Explaining a Deferred Sales Trust, DST, to someone for the first time can be a challenge. Having materials that are easy to share and helps a financial professional present this to a qualified DST candidate is one of Reef Point’s most common requests.