Deferred Sales Trusts (DSTs) are financial instruments designed to facilitate the sale of appreciated assets while deferring capital gains taxes. The structure involves the seller transferring their assets into a trust before completing the sale. By doing so, the seller can avoid immediate taxation on the gains realized from the sale of the asset. Instead, taxes are deferred until distributions are received from the trust, allowing for potential tax planning benefits and the opportunity to reinvest the proceeds without the immediate tax burden. This mechanism can be particularly beneficial for real estate transactions, business sales, or other asset dispositions, helping sellers maintain more control over their tax liabilities and investment strategies. The DST must comply with specific legal and tax regulations to qualify for tax deferral, making it essential to work with legal and financial professionals when setting up such a trust.
```html The Deferred Sales Trust (DST) offers a flexible method for deferring capital gains taxes, enhancing financial agility in real estate transactions. By converting sales into installment arrangements, the DST…