Far too many real estate investors and other investors owning highly appreciated assets in the State of California do not realize that there is a far better way to delay capital gains tax when you sell appreciated assets. You simply do not need to rely on 1031 tax deferred exchanges any longer. If you are currently experiencing a major issue with one, this advanced taxation deferment method is well suited to saving a failing 1031 transaction. The Tax Deferred Sales, LLC proprietary Installment Sale method is how real estate investors and other owners of appreciated assets are in the know delay the payment of capital gains taxes for the long term.
Although it is a fairly simple concept to understand, it can become a bit complicated. Tax Deferred Sales, LLC (“TDS”) is highly specialized in buying appreciated assets as an Installment Sales Purchaser. TDS is directed by an LLM Taxation Attorney with 20 years of Tax Deferral Transaction Experience and Expertise, whom has the specialized know how training, experience, and skills to get the job done in the correct manner. That being stated, this clever strategy works in the following way. The real estate investor, or seller of other appreciated assets, sells to TDS on an Installment Sale basis and TDS resells to a buyer. TDS can even resell to Buyer the Seller had lined up where such Buyer has an outstanding finance contingency which has not yet lapsed.
Tax Deferred Sales, LLC as a Installment Sale Purchaser is legally obligated to pay the Seller. However, TDS does not pay the seller the entire amount of the proceeds at one time. Instead, TDS pays the seller in installment payments. The installment payments are typically payable monthly or once per year. The amount of years that the installment payments occur is pre-determined by the seller at the onset of the Installment Sale deal structure. TDS’ subsequent sale to a Buyer is what provides collateral for the Seller.
So how does the Tax Deferred Sales, LLC Installment Sale Purchase actually delay the capital gains tax payment?
The capital gains tax is only due as the Seller receives the installment payments from TDS as the Purchaser under the Installment Sale. That means the capital gains tax is spread out over the life of the installment payments. For example, if you choose to be paid in twenty (20) installments, the capital gains tax is paid over a twenty (20) year period instead of the entire amount being due in the tax year in which you sold the investment property.
Instead if a lump sum payment was made at the sale date the overall capital gain and other taxation recognized and realized would often be larger than if alternatively the tax payments were spread out over a number of years. This is a most powerful investment tool that helps real estate investors build wealth by increasing their net worth.
You do not need to tie all of your proceeds from the sale of an investment property in another investment property as dictated under the rules of a 1031 tax deferred exchange. Instead, you can use part of your profit from the sale of a real estate investment each year to re- invest in whatever is trending high or into what would not ordinarily qualify under the 1031 “Like Kind” rules. For example, you may decide to re- invest some of those gains in a hot commodity such as gold, or a personal vacation residence or spend some monies on consumption items or higher education for family members.
If you need help saving a failing 1031 transaction in California, please contact Tax Deferred Sales today. TDS has specifically developed a proprietary tax expertise Installment Sale structure to save failing 1031 exchange transactions. TDS can also skillfully implement its strategy for the sale of other highly appreciated assets. Our team of experts specializes in providing customized strategies that delay tax impact. TDS takes great pride in assisting sellers of appreciated assets in deferring the capital gains tax that greatly enhances the ability to grow your net worth. Our company was founded by Paul A. Conte esq. Paul is a LLM tax attorney with over 20 years tax deferral experience and expertise with a singular focus on assuring sellers delay of taxation.