DST Scenarios & Case Studies

Approximate Tax Due:

Total Tax Due:

$6,770,000

VS

Deferred Sales Trust™:

$0

Congrats, You Saved:

$6,770,000

Hypothetical Scenario 1:

Commercial Property Sale in NYC

  • Sales proceeds after commissions and closing costs: $20,000,000
  • Seller’s Original Basis: $5,000,000
  • Capital Improvements: $1,000,000
  • Depreciation: $4,000,000
  • Mortgage Balance at time of closing: $2,000,000
    * Purchase price + capital improvements – depreciation
  • Seller’s adjusted basis: $2,000,000
    * Net sales proceeds minus adjusted basis
  • Taxable gain: $18,000,000
  • Federal Tax 20-25% – Unrecaptured section 1250 gain applies
  • NY State & City Tax 12.7%
  • Medicare Tax 3.8%

Hypothetical Scenario 2:

Primary Residence in Los Angeles

Mr. and Mrs. Taxpayer want to sell the highly appreciated residential property in California that they have lived in for ten years:

  • Sales proceeds after commissions and closing costs: $4,000,000
  • Seller’s Original Basis: $400,000
  • Mortgage Balance at time of closing: 300,000
  • IRC sec.121 exclusion: $500,000
    * Purchase price + section 121 exclusion
  • Seller’s adjusted basis: $900,000
    * Net sales proceeds minus adjusted basis
  • Taxable gain: $3,100,000
  • Federal Tax 20%
  • CA State Tax 13.3%
  • Medicare Tax 3.8%

Approximate Tax Due:

Total Tax Due:

$1,150,100

VS

Deferred Sales Trust™:

$0

Congrats, You Saved:

$1,150,100

Approximate Tax Due:

Total Tax Due:

$2,495,000

VS

DST™ with MOB:

$62,375

Congrats, You Saved:

$2,432,625

* Mortgage Over Basis (MOB) is taxable = $250k is nondeferrable.

Hypothetical Scenario 3:

Business in Chicago

  • Sales proceeds after commissions and closing costs: $10,000,000
  • Seller’s Original Basis: $0
  • Business Loan balance at time of closing: $250,000
    * Net sales proceeds minus adjusted basis
  • Taxable gain: $10,000,000
  • Federal Tax 20%
  • Illinois State Tax 4.95%
    * Doesn’t apply to this situation
  • Medicare Tax 3.8%
    * Net sales proceeds minus adjusted basis
  • Taxable gain: $18,000,000
  • Medicare Tax 3.8%

Meet Our Team

James J. Flick

Senior Attorney

James J. Flick is an attorney, chartered life underwriter, chartered financial consultant, and former cer...

James M. Flick

Attorney

James M. Flick is currently an Associate Attorney for Flick Law Group, P.L. Prior to his current employme...

Meghan A. Collins

Client Programs Manager

Meghan A. Collins is currently the Client Programs Manager for Flick Law Group, P.L. She helped develop a...

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