RankingMastery Podcast

What are the fees for a deferred sales trust cost?

Link: https://rankingmastery.com/edit_questions.asp?action=info&id=1012&a=9048&p=840

It was a million dollar sale of a property on the sales price and 1.5%, which is $15,000 to the tax attorney. That's a tax and legal work that includes lifetime audit defense, which is very important. It also provides indemnification that the attorneys provide for you.

Remember, they've done thousands of closes and have no pending legal litigation as of 2020. They actually haven't had formal audits since 2019. It's very important that you have the confidence in it. That's a part of that onetime legal fee to the tax attorneys.

If your deal is above that price, let's say it's $2 million deal. Then you'd pay at 12,500 or 1.2, 5% on that second million dollars.

If it was a $3 million deal, you put another 12,500 on that third million.

Then if you add all those up together with that's about $40,000. That is the one on time tax attorney fee.

They are 10 year notes. Typically around 8% target rate net of all recurring fees. All these fees I'm about to list now are the recurring fees that are part of the structure and managing the trust.

First one is the trustee fee and the financial advising fee.

No matter how, where the funds are invested, you're looking at about 1.5% of the accounts under management.

If you sold a million dollar deal and you netted $500,000 into the trust, which is our minimum. Then you're looking at about 1.5% on that $500,000.

If we have what's called a tax return once a year fee, it's about $1,200. There's an accounting fee, which is a mark to market report fee. It gets you four reports for $250 per year.

Then you also have the DACA account fee, which is about $1,500. That creates the direct access control agreement.

There's a $10 for a check here for a wire here.

Let's fast forward 10 years down the road, hopefully we've earned 9.5% - 10%.

Net of all those recurring fees with 8% target rate, we can't promise that we know how the market's going to go.

In the past, all of the Deferred Sales Trust has been able to hit that target rate. However, our past performance is not a prediction of future results.

Which you would manage that LLC yourself and you would do a JV partnership with the trust. If you want us to do it that way or you just receive income off of the trust, if it's just a hundred percent in securities. You'll just receive a 1099 and if you dip into principle, you'll receive a little bit. You'll pay a little bit of capital gains tax, but if it's just interest payments, you'll just pay ordinary income tax. After that you take that 1099 and report that to your CPA.

Then as far as the capital gains tax solutions, we're going to file the tax return on behalf of the trust.

Hopefully, that gave you some clarity. If you have more questions, of course, reach out to us.

Watch on Video: https://www.youtube.com/watch?v=ycwxPDDUIOU

Episode Name: What are the fees for a deferred sales trust cost??

iTunes: https://podcasts.apple.com/us/podcast/what-are-the-fees-for-a-deferred-sales-trust-cost/id1500645610?i=1000494113700 Spotify: https://open.spotify.com/episode/0yUJonCUBMEz70RWkrR2v7

We hope you learned something of value from this video. To reach Brett with Capital Gains Tax Solutions directly goto: https://www.capitalgainstaxsolutions.com or email them at: [email protected]

Do you want to get discovered on the web like all or our Guests RankingMastery Podcast Goto the RankingMastery website at https://rankingmastery.com

When the trust sells the property may I keep some of the cash from the sale?

Link: https://rankingmastery.com/edit_questions.asp?action=info&id=999&a=9048&p=841

Let's say you had a million dollar deal and wanted $250,000 to go spend on a boat or go travel. Instead of putting the full million into the trust, you can put just $750,000 and the rest of it would be considered a boot.

If you're in a 1031 exchange, you would pay taxes only on the capital gains tax portion of the money, which you kept for yourself outside the trust.

Watch on Video: https://www.youtube.com/watch?v=yQrVIRasNXM

Episode Name: When the trust sells the property may I keep some of the cash from the sale??

iTunes: https://podcasts.apple.com/us/podcast/when-trust-sells-property-may-i-keep-some-cash-from/id1500645610?i=1000494113703 Spotify: https://open.spotify.com/episode/16bUJAzZa0XAe0EHQOYrNo

We hope you learned something of value from this video. To reach Brett with Capital Gains Tax Solutions directly goto: https://www.capitalgainstaxsolutions.com or email them at: [email protected]

Do you want to get discovered on the web like all or our Guests RankingMastery Podcast Goto the RankingMastery website at https://rankingmastery.com

How can I find a Deferred Sales Trust example?

Link: https://rankingmastery.com/edit_questions.asp?action=info&id=998&a=9048&p=836

Make sure that whoever you're working with has actually closed the transaction. We just did a recent deal for an owner. His name was Dave and he was selling a 128 multifamily unit property in Georgia. It was about a $7.6 million sale and he was looking for a 1031 exchange. For the first time after 30 years, he decided to use the deferred sales trust and here's why.

He was looking at his 1031 exchange options; the short 45 days to identify, 180 days to close and these really high prices.

And he said, you know what? This doesn't make any sense. Why am I going to buy high and take on all this debt just to defer the tax? Instead of doing that, he decided to use the fund sales trust, so he paid off about four and a half million dollars of debt. He put about 3.1 million equity into the trust, and now he deferred about 1.1 million in Capital Gains Tax.

Capital Gains Tax Solutions in my background is multifamily brokerage. I've sold nearly a hundred million dollars worth of real estate mostly in multifamily in Northern California. I have a unique experience when it comes to the 1031 exchange in investment real estate and in helping people to capture high values when they sell as we helped Dave do that.

That's just one story of many deals that we've closed.

Especially if you're selling a high end, primary home business, commercial real estate, cryptocurrency, highly appreciated public stock or private stock to defer your capital gains tax using the deferred sales trust.

Watch on Video: https://www.youtube.com/watch?v=nzYJAY__LBo

Episode Name: How can I find a Deferred Sales Trust example??

iTunes: https://podcasts.apple.com/us/podcast/how-can-i-find-a-deferred-sales-trust-example/id1500645610?i=1000493964180 Spotify: https://open.spotify.com/episode/7KVUOBAcX66iRZoL6qXLh6

We hope you learned something of value from this video. To reach Brett with Capital Gains Tax Solutions directly goto: https://www.capitalgainstaxsolutions.com or email them at: [email protected]

Do you want to get discovered on the web like all or our Guests RankingMastery Podcast Goto the RankingMastery website at https://rankingmastery.com

How can I have my tax advisor or attorney analyze the Deferred Sales Trust (DST) strategy?

Link: https://rankingmastery.com/edit_questions.asp?action=info&id=997&a=9048&p=835

The names "Deferred Sales Trust" and the "DST" are common law trademark names and are not found in the tax code.

Making that really simple... we actually encourage you to bring your CPA or tax attorney to speak with us.

You created the structure and make sure we get their blessing. We really want their blessing, but they do need to sign an NDA and they do need to get on the phone with us too, to make introductions. It is proprietary and protect it. After thousands of closes over 25 years, not one single issue with the IRS, we want to make sure it's it stays protected too as well.

Watch on Video: https://www.youtube.com/watch?v=lzUV-49fj6M

Episode Name: How can I have my tax advisor or attorney analyze the Deferred Sales Trust (DST) strategy??

iTunes: https://podcasts.apple.com/us/podcast/how-can-i-have-my-tax-advisor-or-attorney-analyze-deferred/id1500645610?i=1000493964177 Spotify: https://open.spotify.com/episode/41E2kNaIKnR7dtvXarLJxq

We hope you learned something of value from this video. To reach Brett with Capital Gains Tax Solutions directly goto: https://www.capitalgainstaxsolutions.com or email them at: [email protected]

Do you want to get discovered on the web like all or our Guests RankingMastery Podcast Goto the RankingMastery website at https://rankingmastery.com

How Deferred Sales Trust works?

Link: https://rankingmastery.com/edit_questions.asp?action=info&id=995&a=9048&p=834

This set of rules is sale where...let's say, we did a traditional installment sale set and it came to you as a $10 million bill that you were selling. Then you would have it free and clear, you had a zero basis. Let's say you had a 40% tax. If you didn't know tax strategy... so you have 4 million, if you would sell. Instead, you might consider a 1031, but you also might consider a traditional seller carryback.

So I come to you and say that I want to buy your property for 10 million, but I'm going to give you a $2 million down payment.

If you received $2 million, that's called an actual receipt. You would owe tax on that 2 million, but that other 8 million is in a deferral state because you did a carry back. Your CPA knows it.

We actually insert right before a new buyer comes in. Let's say a new buyer had $10 million. They don't want to do a seller carryback. They just want a new buyer to cash them out. Well, that's what we do.

We line up this new buyer as a broker or your broker does, and they're ready to buy it for 10 million. Tthe trust jumps right in between close of escrow. It is like a simultaneous close. They turned to sellers and say "I want to buy your property for 10 million, but I'm going to give you a zero down payment in exchange for a note."

If the trust gave you a zero down payment in exchange for a $10 million note, how much actual receipt could you receive?

There's nothing at that point. We're in a seller carryback trust. Immediately, they turn around to that buyer who already had the 10 million lined up. It's ready to go, they're going to sell it to that buyer for 10 million.

Now, if the trust is bought for 10 million and sold for 10 million. How much taxable gain is the trust at? Well, it's a wash. The wash you got, they bought and sold for the same price. There's no gain there, the smoke clears, the buyer takes title and the funds are sitting in the trust.

Watch on Video: https://www.youtube.com/watch?v=EGZPknqTX4g

Episode Name: How Deferred Sales Trust works??

iTunes: https://podcasts.apple.com/us/podcast/how-deferred-sales-trust-works/id1500645610?i=1000493964178 Spotify: https://open.spotify.com/episode/5hnzSKEgAxNp0TMwaExWS0

We hope you learned something of value from this video. To reach Brett with Capital Gains Tax Solutions directly goto: https://www.capitalgainstaxsolutions.com or email them at: [email protected]

Do you want to get discovered on the web like all or our Guests RankingMastery Podcast Goto the RankingMastery website at https://rankingmastery.com

How do I know Deferred Sales Trust is legal?

Link: https://rankingmastery.com/edit_questions.asp?action=info&id=994&a=9048&p=833

The evidence is that thousands of trusts have enclosed, 14 no changes, IRS audits and the tax code is IRC 453, which is just an installment sale.

We don't want you to just take our word for it. We want you to bring in your CPA, your tax attorney, your trusted financial advisor.

You will get to know us, sign a nondisclosure agreement, look at the structure and decide if it's going to work for you. 

We don't charge anything unless you do the structure.

We don't charge the time to set up the trust, to get everything in place and ready to go. If for some reason your deal doesn't close or you decide to do something else, no problems.

Consider the evidence.

Bring in your trusted professionals.

Watch on Video: https://www.youtube.com/watch?v=t0c-nd3vNUs

Episode Name: How do I know Deferred Sales Trust is legal??

iTunes: https://podcasts.apple.com/us/podcast/how-do-i-know-deferred-sales-trust-is-legal/id1500645610?i=1000493964176 Spotify: https://open.spotify.com/episode/6X2BkXV1WHfE1UIeHrDcPS

We hope you learned something of value from this video. To reach Brett with Capital Gains Tax Solutions directly goto: https://www.capitalgainstaxsolutions.com or email them at: [email protected]

Do you want to get discovered on the web like all or our Guests RankingMastery Podcast Goto the RankingMastery website at https://rankingmastery.com

How to save a failed 1031?

Link: https://rankingmastery.com/edit_questions.asp?action=info&id=992&a=9048&p=832

The way that tax deferral works is by not taking constructive or actual receipt of the funds.

Someone tells you about a live deal that just closed. It was a 128 unit apartment complex, and the gentlemen had about four and a half million dollars of debt. He decided to use the deferred sales trust for the first time so his equity was sitting at the trust company and he has done a 1031 exchange. He would have had to move to another piece of property but since he had sent the money to the exchange, he hasn't seen yet actual receipt of the funds or constructive receipt. That's the way the qualified intermediary works instead of going directly to his hands.

Now, he's not buying any property, not doing a 1031 exchange. He simply has the funds sent to the Deferred Sales Trust, still maintaining non-constructive receipt. They're not an actual receipt. The funds are in a deferral state.

Now you can invest it into stocks, bonds, mutual funds, hard money lending, apartment complex.

He wants a syndication deal, to do it all without having to take on any more debt or not go into something yet at a timing that doesn't make sense for him. It saves a failed 1031 exchange by simply having the exchange company send it to the trial. It's as simple as that.

We've done a couple thousand of these over 24 years... 14 no change IRS audits, private letter rulings, national law firms. They've all reviewed this. We've had not one single issue with the IRS.

If you're in a 1031 exchange right now, and you're considering not buying you because can't find a deal. You're not sure if deals are going to drop in value due to what's happening in this Corona crisis?

We encourage you to reach out to us today and connect with us so we can, we can save your failed 1031 exchange.

We can reduce your risk, give you diversification, liquidity, and an optimal timing. So reach out to us today.

Watch on Video: https://www.youtube.com/watch?v=uTctEJvmdqE

Episode Name: How to save a failed 1031??

iTunes: https://podcasts.apple.com/us/podcast/how-to-save-a-failed-1031/id1500645610?i=1000493964179 Spotify: https://open.spotify.com/episode/0KKGQyMZXY4GZEoHblZRmR

We hope you learned something of value from this video. To reach Brett with Capital Gains Tax Solutions directly goto: https://www.capitalgainstaxsolutions.com or email them at: [email protected]

Do you want to get discovered on the web like all or our Guests RankingMastery Podcast Goto the RankingMastery website at https://rankingmastery.com

Is there Deferred Sales Trust section 453?

Link: https://rankingmastery.com/edit_questions.asp?action=info&id=991&a=9048&p=

I'm in fact, 453 goes back to the 1920s. It was a part of what the government passed at that time to allow people to do what's called seller carry back or to carry paper and become a bank.

They had to figure out a way to enable and incentivize citizens to become the bank if need to. They wanted the private citizen to be the bank in case the banks are running out of money or the economy dips or falls.

They allow people to carryback, so the deferred sales trust foundation is section 453. That's how the deferred sales trust works.

Ultimately it's your asset to that ultimate buyer where the cash goes into. The cash is sitting in the trust and it owes you a hundred percent of what you sold it for.

That's a quick way of explaining how it works.

You can go to capitalgainstaxsolutions.com to learn more about that.

Watch on Video: https://www.youtube.com/watch?v=2HCkKroGeYY

We hope you learned something of value from this video. To reach Brett with Capital Gains Tax Solutions directly goto: https://www.capitalgainstaxsolutions.com or email them at: [email protected]

Do you want to get discovered on the web like all or our Guests RankingMastery Podcast Goto the RankingMastery website at https://rankingmastery.com