• John Casmon

Capital Gains Tax Solutions to Preserve Wealth with Brett Swarts, Episode 196



Real estate investing is about increasing your capital and if you do it effectively you will grow your wealth. The one downside is the capital gains tax that investors face on the profits of their investments. Luckily, there are strategies that can help investors defer their capital gains tax obligations. 1031 exchanges are popular strategies for real estate investors, but there is a lesser-known strategy called a deferred sales trust.


Brett Swarts has been helping people learn and implement capital gains tax strategies through his company. Capital Gains Tax Solutions. Brett works primarily with high-net worth investors to develop deferred sales trust tools to solve capital gains tax deferral limitations. In this episode, Brett defines a deferred sales trust, explains the difference between a 1031 exchange, and when this strategy works for real estate investing.



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Key Takeaways:

  • Brett helps people create and preserve more wealth through 1031 exchanges, forced appreciation, and multifamily ownership

  • How Brett got through the 2008 crash (note: a side hustle was involved)

  • Understanding Deferred Sales Trust strategy: Manufactured installment sale or a seller carryback or a IRC453

  • What is a 1031 exchange and how to use it effectively

  • How deferred sales trust is different from a 1031 exchange

  • How to keep money out of your hands and invested to avoid taxes

  • A real-world $10MM example of a deferred sales trust deal from a real estate investing standpoint


Don’t let the tax tail wag the investment dog

  • How to handle a deferred sales trust deal when there is existing debt on the property

  • How a deferred sales trust provides a backup plan for a failed 1031 exchange

  • The restrictions of a 1031 exchange

  • The downside of a deferred sales trust

  • Options for deferred sales trust when acquiring more assets

  • Diversify your real estate holdings to reduce your risk

  • 17-20 trillion dollars will pass from one generation to the next in the next 20 years; the largest wealth transfer in history

  • When to use the deferred sales trust strategy


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Bullseye Tips:


Apparent Failure:

He turned down an opportunity to list a $2.5MM apartment complex when employed with Marcus & Millichap, because the owner wanted him to partner with a residential realtor. Because of his pride, he lost that deal and two others because he was viewed as not interested.


Digital/Mobile Resource

Asana

Loom


Most Recommended Book:

The Seasons of Life (Jim Rohn)


Daily Habit:

Miracle Morning


Wish I Knew When I Was Starting Out:

I wish I hired a person to help him reach his vision faster


Current Curiosity:

What’s going to happen in the world in the next 90 days.


Best Place to Grab a Bite in Sacramento, CA

Bangkok Thai


Contact Brett:

Capital Gains Tax Solutions


Capital Gains Tax Solutions on YouTube


Free Guide: Deferred Sales Trust