The foundation of the Tax Strategy lies within Section 453 of the Internal Revenue Code (IRC), a provision nearly a century old that governs the installment method of selling appreciated assets. This section enables sellers to anticipate sales proceeds over one or more years following the sale, providing them with the option to defer taxes until these proceeds are received.

The innovative legal minds behind the Tax Strategy took this established framework and meticulously engineered the installment sale method to minimize or eliminate capital gains taxes that would otherwise be incurred in the year of the sale.

At its core, the brilliance of the Tax Strategy lies in a specialized installment sale arrangement: you sell your asset to an unrelated Trust entity. In return, the trust issues a secured installment note to you. Simultaneously, the trust sells the asset to your designated buyer, receiving the sales proceeds. This creative maneuver allows you to sidestep both actual or constructive receipt of funds and the associated tax obligations at the time of sale.

Subsequently, you have the autonomy to specify the level of payments and installments you wish to receive, directing the sale proceeds into cash or any other types of investments tailored to your specific needs and preferences. This streamlined approach offers flexibility and customization while strategically mitigating tax exposure, making the Tax Strategy an invaluable tool for prudent financial planning and wealth management.

The cornerstone of the Tax Strategy is its essence as a deferral mechanism, distinct from tax shelters or avoidance tactics. It operates by delaying the payment of capital gains taxes that would otherwise be due immediately, shifting them to a later point in time.

Crucially, the tax structure lays out a clear timeline and procedure for the eventual settlement of these taxes.

To grasp its nature, one can draw parallels with familiar financial instruments like IRAs or 401(k)s, all of which share the common thread of deferring tax obligations. In essence, investors defer the receipt of funds, postponing tax liability until a future date when the funds are accessed.

The existence of such mechanisms, alongside 1031 exchanges and pensions, underscores the IRS’s acceptance and validation of deferral strategies.

The paramount advantage of the Tax Strategy lies in its capacity to leverage the time value of money through tax deferral. By postponing tax payments, you can harness the potential growth and purchasing power of future dollars, thereby optimizing financial resources for enhanced flexibility and opportunity.

Consider this scenario: If faced with an immediate IRS debt of $1,000,000, would you choose to settle it right away or defer payment for two decades? The answer is evident: deferral holds sway. Why? Because deferring payment allows for the use of cheaper future dollars, preserving the current capital for investment and potential income generation until a later date when the tax liability can be settled at a significant discount. This strategy isn’t just advantageous; it’s a compelling financial opportunity waiting to be seized.

With a deferred sales trust, the tax implications of selling your real estate asset are notably different. You’re not taxed on the sale proceeds until you actually receive them. Essentially, this defers the tax payment indefinitely, as long as you refrain from personally receiving cash from the sale.

However, it’s crucial to note that any interest payments you receive from the Trust are subject to income tax, akin to profits from other investments. Moreover, if your installment payments include a portion of the principal, that specific segment is subject to capital gains taxes.

The foundation of the Tax Strategy lies within Section 453 of the Internal Revenue Code (IRC), a provision nearly a century old that governs the installment method of selling appreciated assets. This section enables sellers to anticipate sales proceeds over one or more years following the sale, providing them with the option to defer taxes until these proceeds are received.

Track Record:
• 25+ year History
• 1,000’s of Completed Transactions Totaling Billions of Dollars in Assets
• 16 Field Audits by the IRS with “No Change” Letters.
• Proprietary Tax Structure
• Attorney’s provide audit defense at no additional cost.

Our structure, developed over 25 years ago, remains proprietary and is exclusively administered through a closed network of a membership organization. Purposefully not open source, its design has successfully withstood rigorous scrutiny by the IRS for over 20 years.

Opening it up to the public would inevitably invite misuse, jeopardizing its efficacy for everyone involved.

Thus, access is restricted to authorized members within our network, which explains why it might not be widely recognized. Unlike the ubiquitous advertisements for 1031 exchanges, our Tax Strategy operates discreetly, entrusted only to a select few: financial advisors, realtors, trustees, and attorneys. In fact, there is a limited number of individuals in the entire country authorized to facilitate these transactions.

This intentional exclusivity ensures tight administration, maintaining the integrity and effectiveness of our strategy. While awareness is growing gradually, it still represents a minority of our overall deals, deliberately so. We aim to avoid the pitfalls associated with widespread adoption, prioritizing the stability and reliability of our approach over rapid expansion akin to that of a 1031 exchange.

Real Estate, Businesses, Stock, Collectibles, Art, Jewelry, Cryptocurrency

Typically, our Tax Strategy comes into play when an individual realizes a capital gain of at least $700,000 or more. The structure becomes most advantageous with larger deals and higher tax liabilities. We’ve successfully implemented this strategy for our clients ranging from $600,000 to $700 million in capital gains.

For instance, consider an individual in Tennessee with a $1,000,000 capital gain. They’d be looking at a $200,000 federal capital gains tax plus an additional 3.8% for the Affordable Care Act, totaling a 24% capital gains tax.

If their state also imposes a capital gains income tax, let’s say 25%, they’d end up paying $250,000 in total. They could either cut a check for that amount, leaving them with $750,000 to invest, or they could opt for our strategy to defer the capital gains tax, allowing them to invest the full $1 million.

It’s crucial to clarify that this strategy involves deferring the taxes into the future—potentially 10, 20, or more years down the line. This isn’t about evading taxes like something out of the Al Capone playbook. The taxes aren’t avoided; they’re simply postponed. Just like IRAs and 401(k)s defer taxes until withdrawal, our strategy offers another avenue for tax deferral.

Generally, it is preferred we get involved as a contract is getting negotiated because we like to get into the contract with what we’re doing with our structure that will allow us to mitigate the taxes and defer the taxes. It doesn’t mean we can’t get it done.

Our preference is if you’re to the point where you’re negotiating a contract, we want to make sure we did everything right where we want it.

Our Tax Strategy operates on the installment sale method, beginning with the establishment of a promissory note with a 10-year term. This term is carefully chosen to meet IRS scrutiny and ensure commercial reasonableness, akin to a typical business loan. Just as a bank may offer a business loan with a 10-year term because it’s deemed reasonable, our structure aligns with this standard. As the seller, you retain control over the terms, and when the initial 10-year period nears its end, and circumstances are favorable, you have the option to extend the loan for another 10 years.

This process mirrors the flexibility seen in Home Equity Lines of Credit (HELOCs), which often have initial terms due within a certain timeframe. Like a HELOC that may be extended by the bank for additional terms, our strategy allows for similar extensions, providing continuity and adaptability to your financial circumstances.

Exit Strategy: This is straightforward. You’re selling an appreciated asset— be it a business, real estate, or any other asset—and you’re not keen on immediately reinvesting in the same asset class. The Tax Strategy offers an alternative, allowing you to sell real estate and reinvest in real estate while deferring taxes from your initial transaction. This option is particularly attractive if you’re wary of the tight timelines and restrictions associated with a 1031 exchange. With the Tax Strategy, you have the flexibility to park your funds and wait for the right opportunity, ensuring you’re not rushed into a decision within a short 45-day window.

Alternative to a 1031 Exchange: Many opt for the Tax Strategy as an alternative to a 1031 exchange, seeking a relaxed timeline for reinvestment. This is especially beneficial when market conditions are uncertain, offering the opportunity to buy real estate at a discount and make informed investment decisions at your own pace.

Rescue for a Failed 1031 Exchange: In the event of a faltering exchange, the Tax Strategy serves as a lifeline. By working with us and a qualified exchange accommodator, you can rescue your funds from a failed exchange and continue your tax deferral. This ensures you’re not saddled with tax obligations at the end of the 180-day exchange period, providing ample time and options to reinvest your funds, including back into suitable replacement real estate.

Additional benefits of tax deferral: It’s essential to clarify that we’re not advocating tax evasion; rather, our aim is tax deferral—a legitimate concept ingrained in our tax code, as evidenced by qualified retirement plans like IRAs and 401(k)s.

Here are the primary advantages:

Maximized Investment Potential: By deferring capital gains taxes at the time of sale, you retain the tax dollars, allowing them to work for you. This means more capital available to generate income or accelerate wealth accumulation without diluting your reinvestment nest egg.

Strategic Tax Planning: Tax deferral enables you to structure your income needs to align with lower tax brackets, optimizing tax efficiency and minimizing your overall tax burden.

Control Over Timing: By agreeing upfront on the taxes owed and controlling the timing of payment, you effectively pay today’s taxes with tomorrow’s dollars. Whether you choose to defer taxes for a few years or several decades, you retain the earnings on the deferred tax dollars—an advantageous proposition.

The Tax Strategy presents a compelling alternative to the traditional 1031 exchange, offering greater flexibility and a broader array of investment opportunities. Unlike its counterpart, the Tax Strategy enables sellers to diversify their holdings beyond real estate, encompassing assets like stocks, bonds, and mutual funds.

This flexibility proves invaluable, particularly in scenarios where suitable real estate options are scarce or market conditions are unfavorable.

Sellers can comfortably navigate through market fluctuations by remaining within the Tax Strategy structure for extended periods, awaiting opportune moments for reinvestment.

Furthermore, the Tax Strategy empowers sellers with the option to re-enter the real estate market or explore business ventures while affording them the unique advantage of temporarily parking sale proceeds until the timing aligns with their investment objectives. This flexibility is a notable advantage, offering peace of mind without the constraints of tight deadlines or mandatory requirements associated with traditional exchanges, such as upside acquisition costs or debt replacement obligations.

In summary, using the Tax Strategy instead of a 1031 Tax Deferred Exchange to reinvest back into real estate may be ideal for those who wish to: “Park” their money and wait for the right opportunity to enter back into the real estate market; Are selling at a high point in the market and believe that the Real Estate market is about to go through a downturn in values; Have sold property that has been subject to at least 15 years of depreciation write-offs or property stemming from one or more prior exchanges with a total amount of time with claimed depreciation write-offs of at least 15 years.

Addressing concerns about the fate of Trust assets after one’s passing is crucial. Your Trust Note stands as a cornerstone within your estate, offering you the power to direct its distribution according to your desires. We strongly advocate for the harmonious inclusion of your Trust within a well-rounded estate plan, often achieved through a Revocable Living Trust.

This strategic alignment ensures a smooth transfer of Trust assets to chosen beneficiaries, overseen by your designated executor or successor trustee. This arrangement grants them comparable authority in managing

Your team of fiduciary experts comprises three essential professionals dedicated to ensuring the seamless operation of your Tax Structure. Firstly, our tax attorneys, the masterminds behind the Tax Structure framework, bring unparalleled expertise and a steadfast commitment to safeguarding your interests against audits throughout the lifespan of your trust. Their assurance comes at no extra cost to you, emphasizing their unwavering dedication to your financial well-being.

Secondly, our independent trustees play a crucial role in protecting your interests and ensuring compliance with all legal and regulatory mandates. Working closely with the estate planning team, the Trustee meticulously oversees the administration and execution of your Trust, ensuring transparency and accountability at every turn.

Lastly, our licensed investment advisors provide invaluable guidance to help you make informed investment decisions tailored to your unique goals and risk tolerance. With a focus on delivering comprehensive information and research, they empower you to align your choices with your financial objectives effectively.

It’s important to highlight that we seamlessly integrate with your existing network of professional advisors, fostering a holistic approach to your financial planning needs. This collaborative effort ensures you receive the highest level of support and expertise across all aspects of your financial journey