The Deferred Sales Trust Strategy

Why is this man so Angry even after he sold his property?

Because No One Told Him He Could Have…

Avoided paying current capital gains
Eliminated current depreciation recapture
Invested more sale money by eliminating current taxes
Enjoyed lifetime income from the sale
Passed the assets to heirs, estate and gift tax free

All By Using A Deferred Sales Trust!

You’ve all heard of TIC (tenants in common), and the 1031 Exchange, but I bet you have not heard of the DST. What is it? Why do you need to know about it? To help those sellers who don’t want to sell because of the possible tax ramifications that could come from the sale of their home. This is a great way to help your sellers with capitol gains tax and other financial issues when it comes to deciding if they want to sell or not.

I am currently working with a company out of Sacramento called QFN. They are helping me to educate the Real Estate Professionals in my areas with “what is?” and “how to use” the DST. The Deferred Sales Trust Strategy is not an exchange.

These Frequently Asked Questions should give you confidence in introducing a client or prospect to the idea of using a Deferred Sales Trust (DST) to eliminate current taxes on a sale.

Is this legal?	Approved by the IRS, The DSTTM is a legal method, combining several sections in the tax code, which allow the seller of the property to defer capital gain taxes due at the time of sale over a period of time, even beyond your lifetime.
What is a Deferred Sales Trust?	A DST is a type of special sale that allows you to pay capital gains taxes over many years rather than immediately at the time of sale. Benefits include reliable income from the trust, starting when you decide to, flexibility in how the trust is invested, protection from lawsuits and creditors, the ability to borrow from the trust, and the fact that the assets can be arranged to pass to your beneficiaries estate and gift tax free.
What if I’ve sold already?	A Deferred Sales Trust only works if you haven’t closed escrow.
What if I’m in escrow now?	You can still use a Deferred Sales Trust to avoid current taxes, but you may need to delay the closing based on when you’re supposed to close.
How long does it take?	About as long as to close a normal escrow, but the process can be accelerated if needed
What are the advantages?	Avoid current taxes, pay taxes over time, lifetime income, protection from lawsuits and creditors, and no estate taxes to beneficiaries.
What are the payments?	They are calculated based on what you, the grantor, desire. Depending on your income goals and other objectives, the amount and length of term are your choice. You can have a free Illustration Request done that will show you the details.
Are taxes eliminated?	You eliminate taxes at the time of sale, and instead pay them over time, interest free.
Can I wait to take payments?	Yes, you can take payments asap, or wait until you need them, whichever works best for you.
When do I pay the taxes?	You will pay taxes on the income when payments are made by the trust.
How am I taxed?	Part of each payment is returned to you as a tax-free return of basis. The remainder is taxed partially as capital gains and partially as ordinary income. Some depreciation recapture may have to be accounted for as well, depending on the type of asset sold.
Who owns the trust?	In most cases, the trust is owned by family members or other trusted individuals.
Can the seller control the trust?	The seller may not be in direct control of trust investments. The seller may appoint an investment advisor like QFN who will manage any investments made by the trust.
Can I take a loan ?	A loan can be arranged from the trust to the seller for a fair interest rate.
Can additional properties be added to a DST?	Yes, additional property can be added to the trust after it has been established. Many clients decide to put multiple properties in the same trust, as each one is listed for sale.
Is there a limit to the amount transferred to a DST?	No. You may transfer any amount of assets to the DST in exchange for payment without causing a taxable event.
How long do payments last?	For as long as you decide – you establish the term.
Can I keep some cash?	Yes, you can keep some cash from a sale, but you pay the taxes on the cash you keep.
Can I get another opinion?	Yes, of course – we’ll be glad to provide detailed information specifically for your CPA, attorney, and/or tax advisor.
What else should I know?	Not all tax and financial strategies are suitable for all investors. You should always consult with your tax and financial advisors.

More Than Just Tax Savings

A Deferred Sales Trust is much more than just a way to avoid paying current taxes on the sale of a property. Because the proceeds of your property sale are invested via your trust, you’ll be earning interest on the entire amount of sale (rather than an aft
er tax amount) immediately, and for as long as you live. That means the value of your trust will increase faster. And your trust will continue to grow in value if properly managed. Remember that your trust is set up, to ensure that the trust never runs out of money. That means, if properly managed, the trust asset will be worth more when passed to your beneficiaries than when originally established. And the assets are passed to your beneficiaries’ estate tax free!

Current Tax Deferral – Not Avoidance

The power behind the Deferred Sales Trust is that it is a very conservative tax strategy that will help you defer the taxes you have to pay on sales of your appreciated assets over your entire lifetime. The choice is yours and it is simple: Pay the taxes you owe immediately – OR – pay the taxes you owe over your entire lifetime, with a 0% interest-free loan from the IRS!

A Deferred Sales Trust allows you to avoid current taxable gains by deferring the entire gain over your lifetime!

I will be presenting this Deferred Sales Trust Strategy to an exclusive group of Top Producing Real Estate Professionals next week. I am anxious to hear their comments and responses. I personally feel that this is a great option for sellers that are concerned about their equity and having to pay so much tax at the time of their sale. What I am finding is that many in our Industry are not even familiar with this strategy, and so I am taking on the responsibility of letting my clients and readers know it’s out there.

All Content Copyright Protected © 2007 – The Escrow Guy

What is a Legacy?

What is your Legacy?  Is it your name remembered by an action, a quote, or a change to the world?  I have finally made another “life” discovery!  It’s not about me and my legacy, it’s about what I will leave behind one day.  What contributions I have made to the world with the miracles given me. 

THESE PAST FEW DAYS HAVE ROCKED MY WORLD

I just spent this entire past weekend moving my baby, that’s right, my 21 year old baby son Sean, down to Cal Poly in San Luis Obispo, CA.  That’s about 4 1/2 hours from our home.  This was one of the most emotional and overwhelming experiences of my life!  One of the most Happy/Sad moments I have ever experienced.  We drove all his things down in a u-haul truck, moved him into his new apartment, took a walking tour of the campus, stocked his fridge, purchased his supplies, and then waved goodbye as these two grown men, father and son… cried!  I will never forget his face with those tears in his eyes, and a smile from ear to ear.  I don’t think I will ever be the same!! 

Tonight my heart aches, yet my spirit is over-joyed!  My emotions are on this massive roller-coaster, and it seems I am having trouble focusing.  He is all alone in a strange place, no job, no friends (yet), and he starts classes this Wednesday.  His friend will move in with him mid August. I know he’ll be ok.  Why?  Because he is a straight A student, with 4.0 GPA.  Sean just transferred in from De Anza College as an Undergraduate.  He will be starting his Junior year with Cal Poly.  His Major is Business Administration.  Sean’s a great photographer, a musician, and just a down to earth, great human being.  He has never drank alcohol, smoked, or done drugs, and he’s at the Top of his classes.  This is how I know he’ll be ok!!  I am the proudest father on this entire planet tonight!

SUGGESTION: THE ACTIVE RAIN SCHOLARSHIP FUND

Seans tuition over the next two years will cost nearly $40,000.  If each member of Active Rain donated just one dollar, that would be $39,758 dollars (send to the address on my profile of course), (BIG SMILE)  Am I getting creative here or what? LOL!  I thought about coming to all your homes and washing your cars, but I don’t have two years to raise the money!  🙂  Just kidding!  I’ll come wash your cars! 

A LIVING LEGACY 

Seriously though, here is my legacy.  When it is my time to go, I will be leaving behind a trust-worthy and positive contibuter to society, my son Sean.  I dedicate this post to his achievements, his dedication to education, and his “new life” at Cal Poly!  He is a godly young man with a huge future ahead!  It’s so hard to believe twenty years have passed, and now my son is gone.  Guess I have a bit of empty nestor syndrome, but I couldn’t be happier or prouder of him.  Sean will carry on our name for the next generations.  For me, today is one I will always remember as long as I live.  I have discovered that my Legacy is not all about me, it is all about the ones I love and truly care about!!  My son Sean, today and forever, my Hero and my Legacy!

Oh Yeah…GO MUSTANGS!!

Are You Using your Active Rain Statistics Page to Improve Your Blog?

A "GET WELL CARD" For Missy Caulk's Daughter Allyssa

Many of you already know that our fellow member and friend, "Missy Caulk" was in the hospital this last Saturday night, with her daughter Allyssa who was involved in a horrible car accident!  Miraculously, Allyssa is alive but has been hospitalized for an undetermined amount of time.  She will be having surgery today or tomorrow!!  I am dedicating this to Missy, her family, and Allyssa as a "Get Well Card". 

                                                    

 

                                                         

                               

We are part of Missy's family too, her "Active Rain Family!"  Please pitch in and sign this card, so she can print it out, and take it to the hospital for Allyssa to put on her wall.  This is what family and friends are really all about!  Being there in the good times, and the tough times too!  We all wish Missy, Allyssa and their family the very Best!!

Soaring With the EAGLES!

Today, I want to formally welcome a relatively "New Member" to Active Rain.  His name is Francisco Gutierrez from San Diego, California.  He actually joined "The Rain" back in February and has been busy servicing the Southern California Market for First American Title!  When I saw his "Profile Page", I was very impressed with how he structured it.  What a useful tool for his clients and yours.  Please join me and welcome him, maybe we'll get another post out of him!  (No Pressure Francisco) LOL!  Welcome Aboard!!

I normally post information to try and help other members and my invited Active Rain guests, but today, I have decided to take advantage of this opportunity.  I would be remiss if I didn't share this information with you.  I am proud to work for a company that has been on a growth spurt since 1889.  That's a long time.  There are two things I'd like to point out that I think are important, and that you should consider when selecting a Title Company to work with you and your clients.  Experience and Stability. 

I know that it's really all about the relationships, and that's what is "most important" in our Industry.  Since joining AR, I have been fortunate to develop many relationships here.  So, I wanted to share this with you.  (I don't and won't do this too often).  To start, below are some stock charts for the previous one, five, and ten years from our publicly traded stock.   You'll see we are experiencing a healthy and continuous growth.  You can also check our real-time NYSE: FAF quotes at Daily Stocks.  Looking out for my clients best interests has become a true "passion" for me, and this post is no different.  This is not a MEME, or a commercial, just a plug for my business, because that is why we are all here… right? 

"We are a free on-line community for real estate professionals designed to help them promote and grow their business."

                1 Year – 2007                                 5 Year – 2002 -2007                             10 Year – 1997 – 2007

Secondly, here are some other tid-bits of valuable information you may want to know about our company.

                     

• FORTUNE 500® 2006 Rank: 284 Since 2002, First American has been recognized by FORTUNE Magazine as one of America's 500 largest companies.
• Forbes Global 2000 2006 Rank: 960 Ranked on a composite score for sales, profits, assets and market value, First American came in at number 960 among the "Global Giants" on Forbes Magazine's 2006 listing of the 2000 largest publicly traded companies in the world.
• Forbes Platinum 400 For four consecutive years, Forbes Magazine has ranked First American among its 400 Best Big Companies.
• Forbes "Best Bosses" 2003 With an "A+" Efficiency Rating (based on pay vs. shareholder return), Forbes ranked First American's Parker S. Kennedy as the 5th best chief executive officer in the nation for 2003.
• In 2006, First American ranked #11 among all FORTUNE 500 companies for 10-year growth in profits with an annual growth rate of 42%.
  Since 2002, First American has been recognized by FORTUNE Magazine as one of America's 500 largest companies.

Lastly, I share all this with you because I know that this information may be important to you or your clients.  When it comes time to select a title or escrow company, I hope you'll consider us.  The company that has a history of growth, service, excellence and stability, that prides ourselves on trust, integrity, and customer satisfaction.   We are #1 because of the support that many of YOU have provided us over the years. 

On behalf of the entire organization, (and I know I speak for the whole Corporation on this), a very Big and Sincere Thank you!!  I am proud to say that I am a First American advocate, employee, and stockholder, and have been for over 20 years now.  I have no regrets, and hope you won't either.  We want to be your trusted business partner.  Think First, Think First American!

Brad Andersohn
Director of Executive Services
Residential Resale Division
Contra Costa & Solano County
707 888-6299

Real Estate for Sale – See "Active Rain Virtual Tours" Group

That’s right, another group for you to join, but only if you feel it will
benefit you and your business! The next generation of Web Real Estate is using multi-media,
and Web 2.0 technologies to market Real Estate. I have not found an MLS Virtual Tour Group
yet, so I took the liberty to create one yesterday. Come by and check it out! It’s brand new,
it’s exciting, and it’s yours to post any Virtual Tour Listings that you may have!

This is a sample “Virtual Tour” from Real Estate Shows. I did this so you can see how to add a tour to this group. Links are ok, but the actual tours are what’s preferred! If you need help adding your tour, please do not hesitate to contact one of the members below or myself! There are many “VT” companies out there, and they all have different HTML code or ways you can post on other sites or blogs. For this sample, I just cut and paste the code from RE Shows into the post! It’s that easy!

SAMPLE Using

Real Estate Shows

For an Active Rain Member Discount, See Jeff Turners Blog

I hope you’ll enjoy our new group and more importantly, I hope the
exposure your sellers property will get here helps to “Get It
Sold!” When selling Real Estate in todays market requires a little bit of extra
effort, a “Virtual Tour” will never be a minus to your marketing efforts. For those who like to
read books, we have the Active Rain MLS Online, and for those who like to watch movies, we
now have the Active Rain Virtual Tour MLS Online.

Here is a link to the new Group Active Rain Virtual Tours Welcome, and Enjoy! Happy Selling!,

All Content Copyright Protected © 2007 – The Escrow Guy

Do You Click on the Links In A Post? Be honest!

Some readers see the links, but just read right on through the post and then comment.  Then I pose this question, Is it a waste of time to add the links and URL's to our already time consuming posts?  I understand the "Value" of linking, creating links, and using them in our Blogs, but honestly…I rarely click on the links myself unless it really peaks my interests.  What about you? 

I have often times clicked on these links and ended up at wikipedia or a link to a graphic (which I used to be guilty of doing myself), and found it to be distracting from the writers post!  Now, I hover my mouse over the link to see what the URL is at the bottom of my screen.  I have recently added a tool to my Blog so you won't have to do this last step.  I don't know the results that will come from this but maybe a "Snapshot" of the URL Link will get the non-interested more interested.  With Snap, you get a preview of the link before going there.  Is this a good or a bad thing?  It's easy to get the HTML and place on you Blog, but should you? Hmmm…

NOW YOU CAN JUST HOVER YOUR MOUSE FOR A PREVIEW! See the balloon next to the link?

I spend allot of time researching things before I set up the links in my posts, and I know many of the other writers who Blog do the same.  We refer to this as "link love" when it's another member or a link to their post!

You'll notice I have only put "ONE" link in this post!  That's another thing, how much is really too much?  All of this is important stuff to know if you're a serious Blogger and trying to get the most value out of your posts and time!!  Someday, when I grow up, I hope to have ALL the answers…yeah right!!  That'll be the day!  LOL!

Ooops!  I did leave off one very important link here!  Let's test one, Click here —> One Of My Favs   Well..did ya?  Be Honest…

If you're a linker, take the time to be sure your links are valuable to your readers.  If you're a Reader, please take time to review some of these writers links, click on them, some of the links are as good as the post!  Now if you're a Clicker, you'll love this Snapshot!!  Why?  Because it could mean just "One Less Click!!"  (Massive Smile..So Big it Hurt!)  You know what I mean!  It may actually mean "One More Click" and that's what we need!  B-)

Just go to Snap.com  to sign-up and add the HTML code to your blog.  It's easy and free!

All Content Copyright Protected © 2007 – The Escrow Guy                            

The Real Estate Roller Coaster Video – History of Home Prices since 1890

This Roller Coaster Graph is an actual graph showing the Real Estate Market Prices from 1890 to PRESENT! Take a ride through history on this clever creation, and see what kind of breath taking experience we have experienced over the years! Be sure to watch the lower right corner under the youtube logo to see what year you’re actually in. At the end of the video, it shows the graph from which this video analogy or metaphor was created. WOW! Finally a ride and post we can all enjoy, and then go get a carmel apple or some cotton candy! LOL!

The question after this ride is, “What loops, turns, drops, tunnels and climbs do the next 10 years hold for Real Estate Home prices?” The thing to remember that is the most important…“ENJOY THE RIDE!”

Be sure to check out the NEW GROUP – “Active Rain Virtual Tours” for your next great Real Estate Ride using “Virtual Tours.” Let’s get the video rolling on Active Rain!! It’s time for Lights, Cameras, and Action!

All Content Copyright Protected © 2007 – The Escrow Guy

The Real Estate Roller Coaster Video – History of Home Prices since 1890

This Roller Coaster Graph is an actual graph showing the Real Estate Market Prices from 1890 to PRESENT! This post will be removed from this group once we have our first "Virtual Tour" Posted!

REALTOR® – The Way It Should Be

This is a post I just couldn’t pass up, and you shouldn’t either.  I am always looking for ways to help other members, clients and friends with challenges they may face in trying to reach their business and personal goals!  This post may not do that, but I do feel that if you’re in Real Estate and you’re a REALTOR®, then this will be useful information for you!

I have noticed on many posts, including the title’s, where members and writers are not using the preferred method of the word REALTOR®,as expressed by your association.  I hope to keep my Blog interesting by bringing you a gamut or information, tools, useful ideas, and tips on how to make your life easier, and your business better.

   Here’s the first one in a series of future posts:  In order to properly designate an agent as a REALTOR® member, you must know how to add the registered trade mark™ symbol to the word REALTOR.  (BTW – REALTOR is always capitalized)  To add the symbol, hold down the “Alt” key on the keyboard while typing 0174 on the number keypad.

*** IMPORTANT TIP:  Don’t use the numbers above the “qwertyuiop” row of letters.

If you’re using a laptop, hold down the “Alt” and the “fn” (function) key, then press 0174 from the keys displaying numbers the same color as the “fn” key.  The result will be: ®  There is a complete set of alternative characters like this one built into your computer.  To find all the characters in your computer, Click on Start, All Programs, Accessories, System Tools, and Character Map, this will launch a program that will show you each of the symbols and their shortcut keys.

For an example, find the character “½” and look to the lower right corner: you’ll see that it is made by using Alt 0189.   Of course, not all extended characters work in all situations. Experiment to see which make sense for the job at hand. This post is for the few…the proud… the REALTORS®!!

Some others you may find useful:  [ Alt 0169  © ],   [ Alt 0153  ™ ],   [ ALT 0162 ¢ ]  and   [ Alt 0216 Ø ]

All Content Copyright Protected © 2007