TGCI 47: Gain freedom from capital gains tax using a Deferred Sales Trust

In today's show, Pancham interviews Deferred Sales Trust Expert, Brett Swarts. Brett is the founder of Capital Gains Tax Solutions.

Real estate investors have to pay out an extremely high capital gains tax when they sell a property. In this show, Brett explains how a Deferred Sales Trust or a DST can help you defer your taxes, thus allowing you the opportunity to create and preserve more wealth.

We reveal some of the biggest drawbacks of a 1031 exchange, and reveal why are you are better off using a DST. Some of the topics discussed in today's show include when and how to create a DST, cost of creating and managing a DST, and the kind of returns that you can generate using a DST.

Tune in for some great nuggets!

Timestamped Shownotes:

• 02:50 – Brett shares his background information
• 07:39 – Are the rules of a 1031 exchange applicable to a business as well?
• 08:08 – How Section 121 Exclusion can help you save your tax dollars if you have capital gains from a high-end primary home
• 09:44 – Different restrictions in a 1031 exchange
• 10:00 – The biggest drawback of a 1031 exchange – Sell high, Buy higher
• 11:30 – Handling depreciation in a 1031 exchange and saving your tax dollars using a DST
• 13:03 – Do you need to keep the proceeds of the sale with the 1031 intermediary?
• 14:14 – How to use a CRT (Charitable Remainder Trust) for saving your tax dollars
• 15:49 – How does a Delaware Statutory trust work?
• 18:34 – History of IRC 453
• 19:30 – How to save capital gains by selling your real estate property to a DST and then to the buyers
• 21:55 – Who decides the notes or the terms for the DST?
• 23:50 – Can you use the funds parked in your DST, and make fresh investments?
• 26:28 – Who is managing the funds parked in a DST? On a broad level, what is the investment strategy?
• 29:24 – How hedging helps protect asset value in case of black swam events
• 34:09 – When is the right time to create a DST?
• 36:41 – What is the cost of creating and managing a DST?
• 37:56 – What sort of returns can you expect from a DST?
• 39:03 – Can ultra-high networth individuals get rid of estate tax by creating a DST?
• 42:34 - Taking the Lead Round
• 42:34 – When was the first time Brett invested outside the Wall Street?
• 43:17 – What fears did Brett have to overcome when he first invested outside the Wall Street?
• 44:17 – Can you share one investment that did not go as expected?
• 45:10 – What is one piece of advice you would give to someone who is investing in the Main Street?
• 47:02 – Brett shares his contact information

3 Key Points:

1. Different restrictions of a 1031 exchange that you need to be aware of
2. How and when to create a DST (Deferred Sales Trust)
3. Savings and returns that you can generate by creating a DST

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