As a savvy investor, you know that there’s a time to buy and a time to sell. But what’s your exit strategy when it comes to selling one of your high-dollar, highly appreciated assets such as your business, a real estate investment, or even your personal residence?
As a savvy investor, you likely already know that Section 453 of the Internal Revenue Code authorizes you to utilize the installment sale method when you sell a highly appreciated assets so as to obtain favorable capital gains treatment. What you may not know, however, is that when you utilize the Deferred Sale Trust rather than a regular installment sale, this legal, safe and proprietary tax strategy gives you many additional benefits.
Under a bipartisan bill sponsored by Elizabeth Warren (D-MA) and Steve Daines (R-MT), congressional members and their spouses would not only be banned from trading stocks, but also be required sell their individual stock holdings and put their other assets in blind trusts.
One of the main reasons that investors — even savvy ones — give for failing to avail themselves of the many benefits the Deferred Sales Trust (DST) offers when selling a highly appreciated asset is that they fear the up-front legal fee they will pay to establish their own DST is too substantial to be worth it. However, is this really true? Let’s use the following case study to show how paying the DST legal fee compares to paying the costs inherent in foregoing its unique benefits.
Back in 1989, a movie entitled “Bill & Ted’s Excellent Adventure” became the hit comedy of the year. Unfortunately, its two main characters, while funny, gave no indication of being able to think. Instead, they relied on chance to solve their problems.