Like Kind Exchange / Cap Gains Exclusion / Old rollover rule

[irvinehomeowner]

My cousin is still trying to game the system.

So now he said his friend did some trust thing where they put the house in a trust, sold it and as long as they keep the money in the trust, no tax until they withdraw from it?

I think he's spending too much time on TikTok.

I think I know who this friend is... gonna ask them.

 

[zovall]

My cousin is still trying to game the system.

So now he said his friend did some trust thing where they put the house in a trust, sold it and as long as they keep the money in the trust, no tax until they withdraw from it?

I think he's spending too much time on TikTok.

I think I know who this friend is... gonna ask them.

I think the idea with this is that you withdraw the money (and pay the tax) over time so you aren’t in an extra high tax bracket for the year of the sale.

 

[qwerty]

My cousin is still trying to game the system.

So now he said his friend did some trust thing where they put the house in a trust, sold it and as long as they keep the money in the trust, no tax until they withdraw from it?

I think he's spending too much time on TikTok.

I think I know who this friend is... gonna ask them.

Here you go

Deferred Sales Trust 101: A Complete Guide | 1031Gateway

Deferred Sales Trusts provide an alternative to 1031 exchanges for deferring capital gains taxes on appreciated assets. Unlike exchange-based tax-deferment methods, Deferred Sales Trusts are an instance of a special kind of sale, called an “installment sale”, which can be used to defer capital...

www.1031gateway.com

 

[someguy]

Here you go

Deferred Sales Trust 101: A Complete Guide | 1031Gateway

Deferred Sales Trusts provide an alternative to 1031 exchanges for deferring capital gains taxes on appreciated assets. Unlike exchange-based tax-deferment methods, Deferred Sales Trusts are an instance of a special kind of sale, called an “installment sale”, which can be used to defer capital...

www.1031gateway.com

That's interesting.

Seller A sells to trust B via seller financed note
Trust B sells to Buyer C.

Trust B is liquified by sale to C

Trust pays A over time

Seller A recognizes gain proportionally to principal payments made.

Best for sellers who don't need the cash from the sale and are in a tax bracket where the benefit of deferring the taxable gain outweighs the administrative costs. Yolo investing post tax proceeds via traditional sale will need to be weighed against accepting a fixed return negotiated with Trust B on the installment sale + recognizing capital gain over time.

I wonder how A and Trust B come up with the interest rate on the installment sale. Trust B will need to earn a return via a combination of [low risk] investing the proceeds from the sale to C, the delta between it's purchase price from A and sale price to C, and whatever admin fees it can collect in the transaction. There will be more capital available for B to invest with this A->B->C transaction than if Seller A sold directly to Buyer C and realized the full capital gain immediately.

Transacting property isn't cheap. Transacting property twice is twice not cheap. Middle class need not apply to this transaction.

 

[qwerty]

Yeah the juice generally won’t be worth the squeeze for most people