What is the Deferred Sales Trust™?

The Deferred Sales Trust™ is the core service of Estate Planning Team. It has become a popular tax deferral strategy relating to the sale of real estate and businesses. Like a 1031 Exchange, the DST can be used to defer capital gains taxes on real estate but, unlike a 1031 Exchange, it does not require that the taxpayer reinvest in like‐kind property, thereby providing a much wider variety of potential investment options. Moreover, the DST can be used to defer capital gains taxes on high value assets such as a taxpayer’s business, including goodwill, that is typically not applicable to a 1031 Exchange. The DST is a technique that EPT and the Campbell Law Firm created about 20 years ago with the use of an IRC Section 453 installment sale to a third party trustee. EPT has an exclusive relationship with the Campbell Law Firm and vigorously protects the proprietary nature of the strategy so that its members have the opportunity to market a unique financial solution that other advisors and broker dealer’s either can’t provide, or don’t know about.

It is worth noting that Congress is currently threatening to eliminate or severely restrict IRC Section 1031 and investors are starting to realize the DST may soon be their only option for capital gains tax relief.

Certainly, you would reap extraordinary benefits if the 1031 option was foreclosed and the DST was left as the only viable alternative. Even more, CAP rates have been incredibly low questioning the viability of doing such transactions.

EPT has been through dozens of audits with no change. In light of the foregoing, there is likely no better, or more timely tax deferment strategy than the DST allowing for payments and diversification of asset and asset classes.

Deferred Sales Trust Flowchart

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