f you’ve been keeping up with the news coming out of Washington, D.C., the past several months, you know that President Biden’s $1.8 trillion American Families Plan calls for raising the federal long-term capital gains rate from its current 20% to 39.6% if you earn more than $1 million per year. Ouch! As the owner of highly appreciated investment real estate, no one need tell you the enormous negative impact such a capital gains tax hike would have on you when you decide to sell one of these properties.
Deferred Sales Trust
In 1963, the incomparable Bob Dylan wrote “The Times They Are A-Changin.” While his song referred to the societal and political changes occurring in the 1960s, it could just as well apply to the tax changes on the horizon today.
If you’re one of the nation’s 73 million baby boomers at or very near retirement age, you may well have highly appreciated assets, such as real estate or a business, that you want to sell to help fund your retirement. The problem, however, is the potentially enormous capital gains taxes you face if you dispose of these assets via a conventional sale. Unfortunately, these taxes could eat up over half of your sale proceeds.
If you’re a legal or financial professional who caters to a high-asset clientele, you should consider becoming a Deferred Sales Trust (DST) business partner. Why? Because the DST offers your clients numerous benefits when they sell their highly appreciated assets, including the following:
In past posts, we’ve answered numerous “big” frequently asked questions about the Deferred Sales Trust (DST), such as the following: