The Complete Solution for Deferring your Capital Gain
The Deferred Sales Trust offers an ideal solution for individuals who are looking to sell an asset that has significantly appreciated in value. By offering this solution to clients, real estate agents can effectively boost their sales.
Would you still own the property, business, or other assets if you take the capital gains tax problem off the table? Invest in your future with the Deferred Sales Trust – a legal strategy to defer capital gains taxes on your real estate transactions. 1031 Exchange Alternative or Rescue and IRS Compliant Strategy.
A Deferred Sales Trust™ is a smart and legal way to defer capital gains tax and reduce the overall tax burden on the sale of homes, commercial real estate, businesses, and other highly appreciated assets.
By offering your potential sellers new solutions and strategies to not only sell highly-appreciated assets but to defer potential capital gains.
A Deferred Sales Trust (DST) offers an alternative to a 1031 exchange, providing more investment options without the like-kind reinvestment conditions and timeline restrictions. The DST is also an option for a failed 1031 exchange. A Deferred Sales Trust offers benefits for reluctant sellers, including reducing the risk and burdens associated with ownership, diversifying a portfolio, and preparing for retirement. This is especially true for clients looking to both downsize, shift to a new and more desired lifestyle and create a fixed stream of income.
Introducing the Deferred Sales Trust™
The Deferred Sales Trust, or DST is a legal, proven, and IRS-tested tax strategy designed to help Sellers of highly appreciated assets to defer the ordinary income taxes and capital gains taxes over a period of years instead of paying them all in a lump sum. The Deferred Sales Trust gives the Seller/Taxpayer the ability to control their capital gains tax exposure, reinvestment terms, and installment payments made from the trust.
Discussing DSTs to your affluent clients will help you sell more properties
Many Realtors have clients who own property for a long time, and they’re reluctant to sell because of the thousands, or hundreds of thousands, of dollars they will (or may) have to pay in capital gains taxes.
They may know about the 1031 Exchange, an excellent tool that allows people to defer paying capital gains taxes on a sale by reinvesting the proceeds into a replacement property. The problem is, some people just don’t want to go back into real estate.
That’s where the Deferred Sales Trust comes in. Using Section 453 of the Internal Revenue Code, which pertains to installment sales and its related tax provisions, people are able to sell a property or business, defer the capital gains tax, and roll the money into investments other than just real estate.
In which scenarios might your client’s appreciate knowing there is another option, or a way out?
1031 Exchange Alternative
Looking to “trade up” into more real estate, and want to park your sales proceeds indefinitely for the right deal?
1031 Exchange Rescue
Looking for a way out from an exchange that has no suitable upside available in time or is in jeopardy of failing?
Case Study Scenarios
Primary Residence Sale Scenario
Investment Property Sale Scenario
Do you have a current prospective client that could use a DST?
A Partnership with Reef Point, Greg Reese, and the Estate Planning Team
A partnership with The Estate Planning Team and Reef Point, LLC enables you to refer your clients to legal and tax professionals that specialize in this tested and proven strategy, which most lawyers and CPAs are not well versed in. You will not be asked to provide legal or tax advice to your clients, rather our team assists in those matters.
We can provide free initial advice and analysis on whether this tax deferral strategy will work for your clients. By partnering with The Estate Planning Team (EPT) & Reef Point, you become part of a team of professionals collaboratively working to serve a client’s tax deferral objectives. As an EPT & Reef Point partner you’ll gain the following:
- Education by EPT & Reef Point on all facets of DST’s so you can better serve your clients
- Marketing assistance and content
- Client PowerPoint presentations
- Seminar tool kit
- Help in analyzing potential transactions with you
- Collaboration with you, your clients, and their advisors
- The support of tax and estate planning experts
- Personalized lead generation websites
- Regular training webinars
- For Business Brokers & M&A Professionals, you can offer “A Way Out” and sell more businesses
- For Real Estate Professional, you’ll increase listings opportunities and provide clients with value add services
- For all partners, you’ll Create a Competitive Edge and Value Add Service over the Competition
Interested in becoming a Reef Point Partner?
Fill out the form to request an appointment to learn more about becoming a Reef Point affiliate.
*Minimum Viable Transaction
When considering selling an appreciated asset, if the expected tax liability without any particular planning would cost $150,000 or more in taxes, then the DST should always be considered. Said another way, if the amount of the gain or profit that will be taxed on is at least $450,000, then YES you should look into the DST.