As the owner of one or more highly appreciated assets, you may have heard about the Deferred Sales Trust (DST), the innovative strategy that allows you to defer the substantial capital gains taxes you usually face when you sell one of these assets. Some of what you may have heard, however, could be inaccurate.
For instance, many investors erroneously believe that several companies offer the DST. Such is not the case. Only the Estate Planning Team, LLC, in partnership with the Campbell Law Firm, offers this proprietary tax strategy. Todd Campbell, CPA, JD, LLM, originally created the DST as a capital gains tax deferral tool that could save owners of highly appreciated assets thousands of dollars while allowing them to potentially make a profit on the money they would otherwise have paid to Uncle Sam in the year of the sale. Robert Binkele, creator of the EPT, partnered with Campbell 21 years ago when he realized the need to make the DST nationally available.
Legal, Tested and Proven
Since then, the Estate Planning Team has created and implemented thousands of DSTs. But the really good news for you as an investor is that in 14 field audits and several Internal Revenue Service reviews, not once has the DST received a negative tax audit or other adverse result. Furthermore, both prominent and boutique tax firms across the country have likewise reviewed the DST’s strategy, techniques and legal basis, concluding that this is, in fact, a legal, proven and tested tax strategy that they feel quite comfortable recommending to their own clients.
What Exactly is the DST?
The Deferred Sales Trust is a creative proprietary strategy based on the installment sale method authorized by Section 453 of the Internal Revenue Code. The DST, however, gives you all the advantages of a conventional installment sale, but none of its disadvantages. In addition, unlike a 1031 exchange, you have no stringent rules and tight time frames to deal with.
Given that each DST must strictly comply with IRS guidelines, the Estate Planning Team creates and manages all aspects of the DST. Its three core members consist of a tax attorney, a Certified Independent Trustee and a Registered Investment Advisor. You’ll be happy to know that Reef Point, LLC, is an affiliate member of the Estate Planning Team, and Greg Reese, our principal, is one of only 13 DST Trustees nationwide who have been vetted and trained in all aspects of the DST.
You’ll also be happy to know that you can include other professionals on your Estate Planning Team, such as one or more of the following:
- Your tax CPA
- Your financial advisor
- Your real estate broker
- Your business broker
- Your personal attorney
How the DST Works
In a nutshell, the DST works as follows:
- Our tax attorney creates your DST.
- You sell your highly appreciated asset to your DST.
- You receive a secured installment sale contract in exchange.
- Your DST’s Independent Certified Trustee sells the appreciated asset to your intended buyer for the same price as you sold it to your DST.
- You have no constructive or actual recognition of capital gains.
- The Trustee begins making investments on your behalf that you pre-authorize.
- You begin receiving payments in accordance with the terms of your installment sale contract.
Want More Information?
Contact Reef Point today to discover how the DST can work for you.