Capital Gains Tax Solutions
Capital Gains Tax Solutions
Welcome to the Capital Gains Tax Solutions, your shot of clarity to break out of capital gains tax jail, when selling a highly appreciated asset. I'm Brett Swarts, your exclusive Deferred Sales Trust trustee. We're covering cost fees and post-close with your Deferred Sales Trust.
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.
Question: What are the fees for a deferred sales trust cost??
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