You’ve built something valuable: perhaps a rental property you’ve held for 20 years, a business worth seven figures, or a block of stock in the private company you helped grow.

Now you want out, but there’s a shark in the water: the moment you sell, the IRS takes a huge bite out of your profits. Capital gains taxes can easily shred a quarter or more of your windfall before you can reinvest a single dollar.

What if you could sell today, defer that tax bill for years—even decades—and put the full pre-tax proceeds to work immediately?

That’s what a deferred sales trust (DST) is designed to do. And if you own highly appreciated real estate or a closely held business, you need to investigate this strategy before you sign a single closing document.

One note before we start: don’t confuse this with the Delaware statutory trust—the fractional-ownership vehicle that also goes by “DST” in Section 1031 exchange circles. Same initials, completely different animal. (Deferred Sales Trust is also a trademarked term used by a specific promoter network; the underlying technique is simply an installment sale through an independent trust.)

How a Deferred Sales Trust Works in Practice

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