WHAT IS A DEFERRED SALES TRUST

A Deferred Sales Trust (DST) is a financial strategy that can be particularly advantageous when dealing with capital gains taxes on the sale of assets like real estate or a business. Imagine you own a highly appreciated piece of real estate that you're considering selling for $2 million. Without a DST, you'd typically be liable for capital gains taxes on the profit, which could be substantial. However, by utilizing a DST, you can defer these taxes. Here's how it works: instead of receiving the $2 million directly, you transfer the property into the DST. The DST, managed by a third-party trustee, then sells the property on your behalf. The $2 million is held within the trust and can be reinvested, potentially generating additional income. You, as the seller, receive periodic payments from the trust. The crucial benefit is that you only pay capital gains taxes when you receive these payments, allowing you to defer the tax liability until it's more financially advantageous for you. This strategy provides you with increased flexibility and potential tax savings while preserving your wealth. However, it's essential to consult with financial and legal professionals to ensure it aligns with your unique financial situation and objectives.

For more information contact Affiliated Advisors at 940- 566-1313.