There are perfectly legal ways to defer capital gains tax and reduce your overall tax burden.
Those of you who own highly appreciated assets such as homes, businesses, commercial and residential real estate, even high value collectibles, are often reluctant to sell that asset because of the capital gains tax and depreciation recapture costs associated with the sale. There are perfectly legal ways to defer capital gains tax and reduce your overall tax burden.
Deferring taxes legally is not new. Some commonly used tax deferral methods include 1031 exchanges, charitable trusts, traditional seller carry-back installment sale contracts, and the deferred sales trust.
Each has their own unique features and benefits as well as pro’s and con’s. In the table below we will compare Charitable Remainder Trusts with Deferred Sales Trusts.
Comparison Model of the Deferred Sales Trust (DST) versus a Charitable Remainder Trust (CRT)