Deferred Capital Gains

A Deferred Sales Trust (DST) allows owners of high-value assets to postpone capital gains taxes by transferring sale proceeds into a trust. This strategy helps defer immediate tax liability, maximize reinvestment potential, and preserve wealth for long-term financial growth.

Deferring capital gains taxes provides a strategic financial advantage by preserving liquidity, optimizing reinvestment potential, and enhancing portfolio diversification. By postponing immediate tax liabilities, investors retain greater control over capital deployment, allowing for compounded growth, risk mitigation, and improved long-term financial positioning.

A Deferred Sales Trust (DST) and a 1031 Exchange are both strategies for deferring capital gains taxes when selling appreciated assets, particularly real estate, but they have key differences.

A 1031 Exchange allows investors to sell an investment property and reinvest the proceeds into a "like-kind" property of equal or greater value, deferring capital gains taxes. This method follows strict IRS rules, including a 45-day identification period and a 180-day completion deadline. While beneficial for maintaining property ownership, it restricts diversification by requiring reinvestment in real estate only.

In contrast, a Deferred Sales Trust offers greater flexibility. Investors can sell their appreciated assets and defer taxes without being limited to like-kind properties. This allows for a broader range of investment options, enabling them to diversify their portfolios across different asset classes. Additionally, DSTs provide the opportunity for investors to access cash flow while planning for future investments, making them an appealing choice for those seeking more control over their financial strategy.