If you own investments that have experienced significant appreciation since you purchased them, when it’s time to sell, ideally you’d like to find a way to avoid the capital gains tax that can take a big bite out of your profit. That’s where a Deferred Sales Trust™ can work for you.

A Deferred Sales Trust™ is a 1031 exchange alternative, designed to allow investors who own highly appreciated assets to liquidate those assets and reallocate them in such a way that they provide income while delaying the payment of capital gains taxes. Especially in recent years, a Deferred Sales Trust™ has become increasingly popular among investors seeking to avoid capital gains taxes on commercial real estate sales and sales of other high-value investments.

Here’s how it works:

Your asset is transferred into a trust overseen by a third-party trust account manager with you as the designated beneficiary. The trust will sell the asset and then distribute the proceeds of that sale to you over time according to a prearranged installment contract. The sales proceeds can be held as cash or reinvested to build additional value. No capital gains taxes are realized until the installment payments touch the principal. The installment agreement remains flexible in order to allow the beneficiary to control the capital gains tax exposure.

The benefits of a Deferred Sales Trust™ are exceptional:

• As an investor, you’ll be able to devote more of your available funds to your portfolio than you would if you sold the property directly
• Because you’ll have access to greater investment funds from the start, you may realize larger returns
• Larger initial investments can also result in a greater income stream
• Capital gains tax payment are made in installments to help minimize their impact
• Diversification may provide investors with greater stability for their investment portfolio

If you’re considering selling commercial or residential investment real estate or other highly appreciated assets, you can call me to find out how a Deferred Sales Trust™ can help you.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.