HOW DOES THE DST DEFER CAPITAL GAINS TAX ON THE SALE OF MY ESTATE?
If you were to sell your estate assets straight to the buyer and receive your proceeds, you would be liable to pay capital gains tax. By selling your estate to the trust instead, you can defer your capital gains tax.
The act of selling your estate to the Deferred Sales Trust is classified as an “installment sale” in IRC 453 of the tax code. By law, capital gains tax can be deferred during an installment sale since you are not physically receiving the principalle of your sale. Instead, you are receiving a promissory note from the trust. You will then report your sale proceeds to the IRS using Form 6252.
WHAT IF THE BUYER BACKS OUT OF THE ESTATE SALE?
Our team finds a host of suitable buyers for your estate assets. In the event that a buyer backs out of the estate sale, our professionals will actively search for a new buyer. You will not be charged if the buyer fails to complete the sale. We charge contingent fees, meaning you will only incur charges once the sale is finalized and completed.
WHICH ASSETS CAN BE USED TO SECURE MY PROMISSORY NOTE FOLLOWING THE SALE OF MY ESTATE?
You can diversify the investments securing your promissory note. These can include:
- STOCKS
- BONDS
- ANNUITIES
- CDS
- MUTUAL FUNDS
- INDEX FUNDS
- ETFS
- REITS
- PROPERTY
- COLLECTIBLES
WHAT IF I NEED SOME OF THE SALES PROFITS?
When you sell your estate to the trust, you help decide the monthly payment structure for your proceeds. You have the option of taking constructive receipt of a portion of the principal to help cover costs. If you were to take 10% of your principle, you would need to pay capital gains tax on that 10%. If the trust invested the other 90%, you would be able to defer capital gains tax on that 90%. Estate owners can structure their monthly payments to include a small portion of principal and a larger portion of interest every month.
I DON’T HAVE A LIVING WILL OR BENEFICIARIES NAMED. WHAT SHOULD I DO?
The team at Freedom Bridge Capital can create a successful wealth transition strategy for your family. We can help you craft a living will, name your beneficiaries for your note, and develop an investing plan with the guidance of today’s leading financial professionals.