Deferred Sales Trust

Defer Capital Gains Tax

The Deferred Sales Trust is a legal, time-tested option to help business and real estate owners sell their assets and defer capital gains taxes. Thousands of companies, practices, and properties are bought and sold each day. The majority of those sales follow the same roadmap: the seller sells their asset to the buyer and then pays capital gains tax. Capital gains tax rates are extremely high, however – and owners end up paying 20-35% of their profits!

If you sold your business or real estate for $4 million, you could end up paying $800,000 to $1.3 million in capital gains taxes. 20-35% of your hard-earned income is lost immediately after completing your sale. The Deferred Sales Trust offers an alternative that enables you to defer capital gains tax.

Our team knows firsthand that selling your business or property can feel overwhelming. Maybe you don’t know the options available to you. Or perhaps you’re worried you are going to make less money on your business sale than you initially hoped because of the market. Without a financial professional by your side, you may not know where to start.

At Freedom Bridge, our specialists are here to walk you through every step of the process. We start with a free DST analysis to examine all aspects of your financial life. We connect you with leading financial advisors to help determine if the Deferred Sales Trust is the best option to accomplish your goals.

“Over the next twenty years, it is estimated that 20 trillion dollars will transition to the next generation in the United States. Many of these individuals want to minimize their potential tax liability by deferring capital gains and probate avoidance tax situations. According to Pew Research Center, roughly 10,000 baby boomers will turn 65 today, and about 10,000 more will cross that threshold every day for the next 15 years.”

HOW DOES THE DEFERRED SALES TRUST WORK?

The Deferred Sales Trust acts as a third party to help facilitate the sale of your business or property. You, as the seller, transfer your asset to the Deferred Sales Trust. The trust then sells your asset to the buyer. The trust gives you a promissory note, which promises to pay you the proceeds of your sale in structured installments. You, as the seller, can decide how you want your money paid out. For example, you can defer capital gains tax by electing to have the trust invest the entirety of your sale proceeds, and receive interest per the promissory note.

THE DEFERRED SALES TRUST OFFERS FLEXIBILITY, LIQUIDITY, AND DIVERSIFICATION:

FLEXIBILITY

The Deferred Sales Trust is flexible. Once you sell your asset to the trust, you have a choice: if you don’t need the income right away, the trust can invest the entire sum of the sale proceeds and collect interest while deferring capital gains tax. If you do need a portion of the money, you can pay some of the capital gains tax on that portion only and the trust will continue investing the rest.

You can withdraw the entire amount and pay the capital gains tax if needed. Our specialists will work with you to determine your financial goals.

LIQUIDITY

The Deferred Sales Trust converts your business or property asset into a steady income stream. Once you sell your asset to the trust, the profits can be invested by the trust. You can then receive the interest in monthly installments. This creates steady income for you, without the hassles you used to deal with regarding your company or property.

DIVERSIFICATION

The Deferred Sales Trust can invest the money securing your promissory note in stocks, bonds, annuities, mutual funds, CDs, real estate, collectibles, and more. Our Deferred Sales Trust specialists and financial professionals are here to offer guidance and help ensure that the DST investments are consistent with your goals as a creditor.

WHICH ASSETS CAN I SELL TO THE DEFERRED SALES TRUST?

If you have a business, company, practice, or property that you would like to sell, then a Deferred Sales Trust is worth considering. Below are just some of the assets that are eligible to be sold to the Deferred Sales Trust:

SMALL & LARGE BUSINESSES
RESIDENTIAL & COMMERCIAL REAL ESTATE
CRYPTOCURRENCY
MEDICAL PRACTICES
LAND
ANYTHING THAT GENERATES A CAPITAL GAIN

THE LEGALITY OF THE DEFERRED SALES TRUST

The biggest reservation potential investors have about the Deferred Sales Trust is the legality. Many ask “is this legal?” or “Am I allowed to do this?”

The Deferred Sales Trust is a legal and proven way to invest. In fact, the DST is governed by Section 453 of the Internal Revenue Code, which has been established for over ninety years! So, why are people skeptical? The biggest reason people feel weary at first is because the Deferred Sales Trust is not well-known.

Even leading financial advisors and CPAs are unfamiliar with this method of capital gains deferral. As a result, there is some fear involved when people hear about the Deferred Sales Trust because it’s outside one’s comfort zone.

Rest assured, the Deferred Sales Trust has a track record of over twenty years of success.

THE DEFERRED SALES TRUST USES TWO WELL-KNOWN ASPECTS OF THE IRS TAX CODE:

IRC 453

The sale of your asset to the Deferred Sales Trust is classified as an “installment sale.” This is found under Section 453 of the Internal Revenue Code. IRC 453 has been around for over ninety years.

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FORM 6252

This IRS form is used to report any income you receive from the sale of real or personal property coming from an installment sale. You would use IRS Form 6252 to report your income from the sale of your asset to the Deferred Sales Trust.

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WHO CAN INVEST IN THE DEFERRED SALES TRUST?

If you own a business, practice, or property and are looking to sell your asset, then you may be eligible to use the Deferred Sales Trust. The DST is ideal for owners who are looking to sell off their assets and transition to the next phase of their financial life.

dst for retirement

Many of our investors sell their company or real estate to the Deferred Sales Trust, and then retire. This allows you to make money per the terms of your promissory note and adds another stream of income into your life while you transition to retirement.

dst to simplify your life

If you are tired of owning your business, looking to sell your primary residence or home, or maintaining your rental property, then the Deferred Sales Trust is an attractive option. Owners can sell their assets to the trust and give up the headaches of owning that asset. The profits from the sale can be invested by the trust, letting the sale proceeds make money for you in the form of interest.

dst for wealth succession

Perhaps you own a company or property and would like to transform that asset into wealth for your children and grandchildren. The Deferred Sales Trust can help preserve the principal you gain from selling your asset. Your promissory note can be passed down to your beneficiaries, giving them a steady stream of interest income.

HOW DO I LEARN MORE ABOUT YOUR DEFERRED SALES TRUST?

The Freedom Bridge Capital team would be happy to speak with you to see if a Deferred Sales Trust is right for you. Please give us a call at 800-897-0212 or request your free DST analysis today by filling out the form below.