Deferred Sales Trusts (DSTs) offer a powerful way to manage tax deferrals while maintaining control over your financial future. While IRS regulations require an independent third-party trustee to oversee the trust, you still have significant input into its operation and flexibility in managing and repaying your funds.
You maintain substantial control over your DST by approving all investment decisions while ensuring the trustee manages the trust to comply with tax regulations. Profits remain tax-deferred because you do not have unilateral control. The promissory note, a critical element of the DST, allows you to determine the interest rate and repayment structure based on your risk tolerance. The DST is tailored to suit your financial goals, whether you prefer interest-only payments or installments, including the principal.
Repayment terms are highly customizable. You decide the term length, typically between one and ten years, and the frequency of payments, with options ranging from monthly to annual schedules. Investments through a DST are remarkably flexible, extending beyond real estate to a diverse range of assets. If your financial needs or goals shift, you can restructure your repayment terms anytime. This adaptability makes DSTs a versatile tool for tax deferral and financial planning.
source: https://capitalgainstaxsolutions.com/taking-control-of-your-dst-with-a-well-structured-payment-plan/
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