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The 1031 Exchange is the best-known way to defer capital gains on the sale of a property. The problem for syndicators is getting ALL of your limited partners (LPs) on board—which is next to impossible. So, what do you do if several LPs want to cash out but the rest are looking for an option to defer?

The Deferred Sales Trust may just be the perfect solution.

Brett Swarts is the CEO of Capital Gains Tax Solutions, a firm dedicated to helping clients leverage the Deferred Sales Trust as a tool to overcome capital gains tax deferral limitations. He is also an experienced commercial real estate broker and investor, boasting $85M in closed transactions and a portfolio of multifamily, senior housing, retail, medical office and mixed-use properties. With more than 12 years of experience in the brokerage industry, Brett is committed to helping people create and preserve wealth and educating HNWI around capital gains tax deferral via the Deferred Sales Trust.

Brett joins me to discuss the options we have for deferring taxes on the sale of a property, the 1031 Exchange and the Deferred Sales Trust. He shares the problems associated with the 1031, including the 180-day deadline, the pressure to buy a new property, and the challenge of getting all the investors in a syndication to agree. Brett goes on to explain the fundamentals of the Deferred Sales Trust as an alternative, describing how the process works and its benefits in terms of timelines and customizability. Listen in to understand the costs associated with the DST versus the 1031 Exchange and learn how to choose between the two—and avoid paying capital gains taxes!

Brett Swarts – Key Takeaways

Brett’s path to founding Capital Gains Tax Solutions

The mechanics of the 1031 Exchange

The penalty for not meeting 1031 deadlines

The downside of the 1031 Exchange

The fundamentals of the Deferred Sales Trust

How you use the funds in a Deferred Sales Trust

The advantages of utilizing a Deferred Sales Trust

What to do if your investors are divided re: a 1031 Exchange

When to choose a 1031 Exchange vs. the DST

The costs associated with the 1031 and the DST

Connect with Brett

Capital Gains Tax Solutions

CGTS on YouTube

CGTS on Facebook

Brett on LinkedIn

Brett on BiggerPockets


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