How To Save a Bundle On Capital Gains Taxes With The Deferred Sales Trust™

Ready to Increase Your Income and Pay Yourself Instead Of The IRS? Read On.

Afraid To Sell Your House Because You're Worried About Capital Gains Tax?

The IRS Takes A Hefty Chunk Out Of Your Highly Appreciated Home Sale

Many Homeowners Just Like You Would Sell Their Homes If It Weren't For The Hefty Capital Gain Taxes

Almost every Senior and Boomer we talk with cites capital gains taxes as the number one reason they haven't pursued selling their home.

Even if you're ready to downsize, capital gains taxes could prevent you from traveling, moving closer to family, or paying for care, or freeing up cash for other retirement priorities.

homes for sale

If You've Owned Your Home For 30 or 40 Years, Chances Are It's Appreciated Quite A Bit

A house that you bought 40 years ago for $50,000 or less could easily sell for $2,000,000 today. That sounds great until you realize that...

You Have To Pay Between 15-37% of the Profit in Federal and State Capital Gains Taxes.

For typical house that sells for $2 million, after a $500,000 couples exclusion that's over $275,000 paid in federal and state taxes. These funds could potentially support you for the rest of your life in addition to being passed on to your heirs.

What If You Could Pay Yourself Instead Of The IRS?

The Answer: You Can With The Deferred Sales Trust™

Real Estate's Little-Known Secret: The Deferred Sales Trust™

How To Pay Yourself Instead Of The IRS

To Protect Your Appreciated Asset, Set Up A Deferred Sales Trust™

A Deferred Sales Trust™ is a legal, tax-compliant trust to which you sell ownership of your property for the home sale transaction.

Your House Is Sold to Your Trust

All the money from the sale of your home bypasses the IRS 100% legally and goes straight into your Deferred Sales Trust™.

The Money In Your Trust Is Safe From The IRS

With a DST, you get to keep every cent of the proceeds from the sale of your home. And as long as you keep the principal (capital gains) in the trust, your capital gains tax will be deferred. In our example, that would be over $275,000 straight into your pocket instead of to the IRS.

The Extra Money Earns You Interest You Can Live On

Instead of going to the IRS, the deferred tax money saved stays in your trust, earning interest that you can live on for the rest of your life. A DST has the potential to generate more money over the long run than a direct and taxed sale.

You Can Even Pass The Extra Money On To Your Heirs

So Why Doesn't Everyone Use A Deferred Sales Trust™?

Keller Williams Realty has a unique relationship with two entities: an estate planning team and a wealth management firm.

Together they have been creating and servicing tax code-compliant Deferred Sales Trusts™ for clients over the past 16 years. To date they've created over 2000 DSTs for people just like you.

Few realtors are aware of or understand how to use a DST to help their customers. And it's just one more benefit of choosing Anita Gat Group – Senior Transition Experts for all of your family's real estate needs.

How Can I Get Started?

Let Anita Gat Group – Senior Transition Experts Ease Your Capital Gains Tax Worries

Call (650) 906-0640 or email [email protected] to learn more

No-Cost Capital Gains Tax Solution: How It Works

What It Includes And Why It Won't Cost You A Dime

1. Due Diligence

The process starts with initial due diligence and market research.

2. Agree on Terms

The process starts with initial due diligence and market research.

3. Dedicated Trust Set Up For Seller

If the transaction is feasible, a dedicated trust is set up specifically for the seller and the contemplated transaction.

4. Property Sold to Trust

The property owner then sells ownership of the property/capital asset to the dedicated trust.

5. Payment Terms Arranged in Advance

The term of payments are established in advance and pursuant to the installment sales contract negotiated by and between the seller and the trustee.

It is strictly a private arrangement between the trust and the seller.

6. Trustee Pays Seller For the Property

Next, the trustee pays the seller for the property/capital asset.

The payments may begin immediately or they may be deferred for some period of months or years at the discretion of the seller.

7. Trust Sells Property

The trust then sells the property to the buyer.

There are generally minimal capital gains taxes due from the trust on the sale since the trust purchases the property for a price and value similar to what it may sell for.

8. Seller Pays Taxes As He/She Receives Payments

It is important to understand that payment of the capital gains tax to the IRS is done with an “easy installment plan” as the seller receives the payments.

Part of the payment received is tax-free return of basis, part is return of gain which is taxed at capital gain rates, and part is interest.

You can also choose to receive "interest-only" payments and preserve the principal.

Benefits of Using a Deferred Sales Trust™

There are significant benefits to a Seller/Taxpayer in electing to use the DST when selling their property/capital asset

When the asset is sold, capital gains tax is deferred until the seller actually receives the payments of principal.

May accomplish an “estate tax freeze” for estate tax purposes.

The potential to pass on a large portion of the note principal to your legal heirs with proper estate planning.

Converts an illiquid asset into monthly payments.

Provides a stream of income that can be used as retirement income.

With proper estate planning, a DST can help executors avoid probate.

By utilizing the DST, you have taken an asset that is otherwise “exposed” and converted it to a “no-liability” asset.

...as happens with the competing strategy known as a Charitable Remainder Trust.

The Bottom Line: The DST has the ability to generate substantially more wealth over the long run than a direct and taxed sale.

It may be superior to the Charitable Remainder Trust, installment sale or like-kind property exchange in many respects. Consult your tax advisor to discuss the potential benefits of this option.

Ready To Get Help Selling Your Home Capital-Gains-Tax Free?

Call us today at (650) 906-0640 to request a "Free DST Illustration" or go to www.mydstplan.com/anita.

Frequently Asked Questions About the Deferred Sales Trust™

There are significant benefits to a Seller/Taxpayer in electing to use the DST when selling their property/capital asset

The payments are based on what you, the seller, arrange and pre-negotiate with the trustee. Depending on your income goals and other objectives, the amount and length of term of the installment sales note are your choice and subject to your agreement.

With proper estate planning (i.e., by creating a living trust) scheduled installment note payments otherwise due to you can continue to be paid to your legal heirs according to the note term that you have chosen.

Yes. The trustee may allow you to refinance your installment sales note to extend or shorten the note term or to provide you with payments (or greater payments) of principal (and should you decide to take an “interest only” note initially).

If the trustee deems appropriate, he or she may elect to terminate the installment sales contract. However, you would immediately owe all the taxes, including all unpaid capital gains due from the original sale of the property/capital asset.

Politicians, from time to time, discuss changing capital gain rates. If that happens, you would pay the new rate on the capital gains portion of your installment note payment. However, there is usually adequate notice to make a sound financial decision prior to any such change in taxation or tax rates.

Yes, please contact the Estate Planning Team or a duly qualified DST tax professional to discuss this option. We recommend that you work with Estate Planning Team’s Professional Advisors who are experienced in trust law, trust asset management and tax law.

Yes, in that case you would pay taxes only on the capital gain portion of the money which you kept for yourself outside the trust. Of course, the basis and any exclusion is not subject to capital gains tax.

For detailed technical information, have your CPA contact us at (650) 906-0640 and we will put you in touch with the Estate Planning Team, Inc. for a full legal and tax cite package. The names Deferred Sale Trust™ and DST are common law trademarked names and are not found in the code. All of the legal and tax authority used in the DST are in the tax code, treasury regulations, cases, or rulings based upon the foundations found within the tax law.

It’s very easy.
Your next step is to complete a “free illustration request” on-line at mydstplan.com/anita.

Or, you can call (650) 906-0640 and request a “free DST illustration” which will illustrate your particular facts and circumstances surrounding your potential sale as it relates to utilizing the DST. 

Once you have received the illustration summary, you can then review this information with a trust case manager and share this information with your CPA or tax attorney for further review.

Stay in touch with Anita Gat at (650) 906-0640 to coordinate with Estate Planning Team, Inc.

The representative listed on this website is not an attorney, or a Certified Public Accountant, or a qualified tax advisor.

Neither Anita Gat nor Keller Williams assume responsibility for the accuracy of the information herein.

Deferred Sales Trust™ and DST are trademarks of The Estate Planning Team, Inc.

The publication of the Deferred Sales Trust(TM) on this website is designed for informational purposes only in regard to the subject matter covered.

The material on this website does not constitute an offer to sell or a solicitation of an offer to buy any security.

Any such offer may only be made based on review of client’s individual financial situation by The Estate Planning Team, Inc. upon request.