If you’re new to the concept of a Deferred Sales Trust, you likely will have numerous questions about what a DST is, how it functions, and how you go about creating one.
Deferred Sales Trust
As a financial or legal professional, you’re always looking for ways to better help your clients. But not just any “way” will do. It must truly be of value to your clients. It must be legal, proven and tested. It must allow you to ethically practice within your rules of professional responsibility. It must be something you feel very good about yourself so you can responsibly advise your clients about it and recommend it to them.
As you’ve likely already discovered, divesting yourself of substantially appreciated commercial real estate investments can be tricky at best. A straight sale exposes you to a huge long-term capital gains tax payment. A 1031 exchange has numerous rules and narrow time frames that can make it unfeasible. What to do?
Even though the Deferred Sales Trust has been available for more than 20 years, it’s still relatively unknown. If you’ve never heard of a DST, the most important thing you need to know about this unique, proprietary strategy is that it allows you to defer your capital gains taxes when you sell a highly appreciated asset. But that’s just the beginning of what a DST features and how it can benefit you.
If you’re an investor with a high tolerance for risk, you likely have invested in one or more digital currencies, i.e., cryptocurrencies, in the past decade or so. Bitcoin, the granddaddy of them all, only appeared in 2008. Today, however, you have over 6,700 different publicly traded cryptocurrencies to choose from. Their total value, as of Feb 18, 2021, was more than $1.6 trillion. On that date, Bitcoin alone was worth over $969.6 billion.