What is the Deferred Sales Trust with Mark Podolsky

[Brett P Swarts]

Mark:

What is a deferred sales trust?

Brett:

Great question, Mark. A deferred sales trust is a manufactured installment sale. You and Scott probably in your listeners know, no seller carry back is an installment sale. IRC 453 is the section of the tax code. But what we do is we insert this trust right before the closing of escrow, which gives so many more benefits and then a traditional installment sale and solves so many more challenges that people are faced with when they're looking at a 1031 exchange. 

And so what we like to say is that most commercial real estate owners, business owners, and high-end primary homeowners, they struggle with capital gains tax somewhere between 30 and 50% of their gain. And it's brutal, they feel trapped a lot of them and then a lot of them are getting older too. And, they maybe want to diversify and choose something that's an alternative to real estate or a different time. And so we use this deferred sales trust to give them tax deferral, liquidity diversification and the biggest thing that I would stress, if you're listening to anything, is the ability to buy an optimal timing into commercial real estate, so that they can create and preserve more wealth, and if it's a business professional, so they can add massive amounts of value to their syndication partners, and or their clients as a financial advisor or business professional.

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