A Deferred Sales Trust (DST) offers a flexible and legitimate way to defer capital gains taxes on high-value asset sales, including real estate, Bitcoin, businesses, and more. Many tax advisors and CPAs may not recommend DSTs simply because they lack direct experience or detailed knowledge about them. However, DSTs are firmly rooted in Section 453 of the IRS tax code, which governs installment sales, and they have been validated through private letter rulings and audits, confirming their legality. Unlike monetized installment sales, which have faced IRS scrutiny, DSTs follow a safer and more structured approach.
With a DST, you can customize your payment schedule and investment strategies in collaboration with your trustee and financial advisors, ensuring the setup aligns with your goals and financial needs. Payment terms can also be adjusted after the sale, offering flexibility for changing circumstances. DSTs handle a wide range of assets beyond the limits of a 1031 exchange, allowing reinvestment into various property types without strict timelines. To determine if a DST is right for you, consult with a qualified trustee who can guide you through the process and help you make the most of this powerful tax deferral strategy.
source: https://capitalgainstaxsolutions.com/youve-got-questions-about-deferred-sales-trusts/
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