Today’s guest could save you millions in taxes when you sell your business. That’s right, capital gains taxes could end up consuming 30-50% of the sale price of your business.

The President and CEO of “Capital Gains Tax Solutions” joins me today to help you save money when selling a business or other asset that’s increased in value.

Please welcome Brett Swarts.

Episode highlights:

  • 0:23 – Brett Swarts Background
  • 1:46 – Gain Tax
  • 2:45 – Federal and State Tax
  • 4:35 – Percent goes to Obamacare
  • 9:27 – Legal Loophole

Learn more about this guest:

 

Contact Info

  • https://capitalgainstaxsolutions.com
  • https://www.linkedin.com/in/brett-swarts/
  • https://twitter.com/1031option

 

Podcast Episode Transcripts:

Disclaimer: Transcripts were generated automatically and may contain inaccuracies and errors.


Brett Swarts. What’s up. Thanks for jumping on learning from others. Daymond. Excited to be here. Thanks for having me. Yeah. So, you know, we were talking just briefly before we hit record and there’s a lot of great things we can talk about. So I’m gonna, I’m going to ask you the usual two questions and then we’ll kind of pick our path from there.

So question number one is what are you good at and what are we gonna learn from you today? Yeah, so I’m good at helping people clarify their capital gains tax referral options. When they go to sell their business or a highly appreciated asset and helping them create and preserve more wealth along the way.

Cool. And that’s going to go a million different directions. So I’m really excited to talk about that before we get into that question. Number two, what do you suck at? So good at keeping organized around the house? So my wife and I, we have five kids and I’m sometimes I’m like the six kid and I’m an entrepreneur moving through fast and you know, my, my clothes, my different things.

And I just, you know, I’m not very good at some of the details when it comes to things that are related to my business. You know, it’s funny. I liked how right before we hit record, I was like, Hey, I’m probably going to ask you what you’re not good at. And you’re like, yeah, yeah, yeah, I got it. And then, and then what was funny is as I see you on camera writing it down, you’re like, I need to organize this before.

So it’s like, you’re, you’re reminding yourself that you’re bad at reminding yourself as you write down that you’re reminding yourself. Exactly. Exactly. Oh man. That’s nice. You know, capital gains. Um, what, why don’t we just start. Defining that, because I, I think if, if you, the audiences like me, there’s going to be some stereotypes and a lot of that’s going to lean towards real estate, but it sounds like it can go way beyond that.

Yeah, so most entrepreneurs, right? Or businesses owners, they struggle with capital gains tax. And what is capital gains tax? Well, it’s basically the tax that the government charges you for any success that you’ve had and a business or piece of real estate. Um, so for example, let’s say you’re a startup company and you’re worth, you’re worth a million dollars right now.

And, and you put in about. You put in about $200,000 of, of, of your own capital and, and, and, and, uh, buying things. Your basis is 200,000. That’s what you’ve put in. And now if you sell for a million, you’re going to have a gain. And that gain is going to be 800,000. Well, the government says that, congratulations, Damon, you just had a great gain.

We’re going to charge you between 30 and 50%. Of that is going to be our tax on your success. And essentially they’re your partner. They’re the silent partner that nobody ever really wants to talk about until, until you go to close that transaction, is that 30 to 50%? Is that all federal or is that a combination of federal and state?

So it’s state, federal Obamacare and is also depreciation recapture. So if, if your, if your listeners were to go just to look up capital gains tax rates right now, they might think, Oh, that’s so bad. It should be 15 to 20. Well, depending what state you’re in, that’s the first thing. But the number two, as soon as you’re having it, High high sales price.

You’re going to get jumped into a whole nother bracket if you sell and capture all that in one year. So that’s really the key. So I live in California. Our minimum is, is, is about 37% for an investment property, for a business it’s going to be 37%. And then you add what’s called depreciation recapture, which depending on how much you’ve depreciated over the years, you’re also going to cut with that.

And that’s what moves us up into the 40, 45 and 50%. That’s crazy that, um, I didn’t know that there was brackets. And so is that, is that, are those brackets introduced at that state level or is that also at a federal level? Right. So it all depends on the state where you’re at. So definitely on the federal and you’re right.

There are some different ones in the state. Um, and most of our transactions are at least at least a million or better. Right. Our average deal is about 2.6 million and we’re deferring somewhere around 500,000 or so in capital gains tax liability. And so as soon as your those levels, yes. Right. And that’s, that’s really the key here are, if your deal is too small, We’re probably not, we’re not going to be a good service to you because, um, their tax is too small.

And if your tax is too small, then you just pay the tax anyways. And, um, and our minimum is 500,000, uh, proceeds, and then a hundred thousand of liability for your listeners who are wondering. Okay. So before I get too far, I got some more questions, but before I get too far ahead of one of the things you mentioned, you mentioned Obamacare too.

So how does the percent go to Obamacare? I essentially it’s, it’s kind of like a Sur tax. It’s about 3.8%. And so let me give you an idea for, so California fi we just closed the deal. Uh, last week it was a business owner out of Walnut Creek, the Bay area. She sold the 2.0. $2 million real estate transaction.

And for her, she had a 20% federal. She has 13.3% state. She had 3.8 or so 7% for Obamacare. And then she had depreciation recapture. You add all of those up hers is about 40% of her gain her lab. So her gain was eight. Her her basis was 800,000. She sold for about 2.2. So that was the gain portion, right?

About 1.4 or so of that she would have paid 40% of that, which was, I think around $800,000, $850,000 if she didn’t use our service. So every state is specific. Um, and, but all of them will have a Obama care if it’s a business sale and or if it’s a piece of real estate sale. Um, but most folks, as soon as they see anything above 30%, they’re like, Um, and it’s above 500,000.

They’re gonna pay, um, after gain. They want to talk to us. So that’s, that’s that, but yeah, we have a calculator that figures all that out. I’m staring at you blankly because I really, I had no idea that Obama care gets factored into a business cell. Because, you know, you think, okay, if I’m a carrier health insurance, um, obviously it comes out of paychecks and things like that, but I had no idea it was tied into a transaction, like, like a capital gains.

Oh, that’s the heart of that question. Yeah. So they had to figure out a way to pay for all this. So, so H you know, healthcare is not free, right. And things like, so, you know, the government’s dealing with $23 trillion of debt, and guess where they’re going to come to find that money. They’re going to come to find for those who are successful and those who are wealthy and those are selling transactions.

So that was just something that was put in. They figured out how do we pay for this? Well, let’s just add this 3.8% on top of what they’re already paying for all of the other capital gains tax. And that’s really at the heart. What we’re about. We want to provide capital gains tax deferral, but really freedom to be able to create more wealth and not just pay it to a government that really wastes.

We sit away no matter what side you’re on really fast. Yeah. All right. So I’m not abandoning the Obamacare topic yet because this is, this is getting more maddening or we’re talking on a personal level here. Dammit, Brett, you’re hurting me right now. So because what’s, what’s even more interesting about this is, is I don’t wanna get into politics cause I’m, you know, I am not one of the beneficiaries of it.

And, and so I’m not going to say like, Hey, there aren’t beneficiaries. I get it. Like some people are on the, on the positive side of that. I’m not one of them now. So like the example was, you know, my insurance went from 250 bucks a month to nine 85 the first year. And now I’m up to 1300 bucks a month for way worse coverage, way higher deductibles, way smaller networks.

So I just assumed like that’s where all of the funding was, was, was going to fund Obamacare. So that’s why it’s even more amazing to me that there’s like this whole other. Big ass chunk of revenue. That’s that’s going into it. So now, now, now I just am even more lost as to why my, my, um, insurance premiums have gone up so much.

Yeah. The more you think about it, the more you’re going to hurt. That’s why I got the Christian healthcare ministries, um, for mine, uh, for my insurance health insurance, and we pay $500 a month. For when I have a family of, we have five kids and my wife and I, so seven of us and anything below 500 we’ll pay out of pocket for ourselves, but anything above that they’ll pay for.

So I just had surgery on my appendix. They just took it out. It was a $30,000 surgery. And all of it’s paid for by Christian healthcare ministries. So that, um, for your listeners who don’t know, maybe check out sharing because it’s, otherwise, if I got Kaiser, I’d be $2,500 to 3000 a month for the family of seven.

I think it’s insane to consider. So now at least I’m at 500 right now. Yeah. Yeah. All right. Okay. Moving on. All right. So, um, one thing that’s interesting, you know, a lot of these topics are very interesting to me because I’ve had discussions in the past and some of the Westerners will be familiar with those discussions about no, I had venture capital group come to me years ago and say, Hey, we want to buy your company, roll it into another one.

I ended up backing out of those discussions because. You know, something wasn’t right there. But, but I learned a lot yeah. In those discussions. And then during those negotiations, I also talked to my accountant and said like, Hey, if I ended up selling, like, you know, what are the tax liabilities? And so it’s interesting that you had talked about taking earnings in one year versus, you know, somehow splitting it up.

Can you talk more about that? Cause I didn’t know. That was an option where, you know, I just assumed once the deal was done, whether you get the cash. All upfront or in three years, once the transaction is done, the government, from what I understood, the government is going to be like, well, it’s a done deal.

So pay up. Great question. So let’s, let’s talk about the, the foundation of the structure and kind of how this whole thing works. And so we’ve already kind of defined the problem. It’s 30 to 50%. Now that was looked for a legal loophole. The legal hoop loophole is what’s called a deferred sales trust. What is a deferred sales trust?

Well, it’s just an installment sale. Okay. And so simply put Damon, if you carry paper, in other words, you become the bank. Let’s imagine you’re selling a. $10 million business today. And let’s say you had a zero basis, right? Tech startup, and it’s all in your brain. Yeah. Yeah. You have some systems, but it hasn’t cost you tons of money and, or you’ve depreciated those over the years.

So now you’re going to sell now, if you sell for 10 million, right. You’re going to go somewhere. Let’s just use 40%. Okay. $4 million in tax. Okay. So you can have 6 million or you can use. A tax referral strategy to defer that and earn interest on that and live off of that interest. Okay. Now, but if you don’t do anything, you’re right.

You receive it all in one year and you take that full $10 million payment. Boom. That tax is triggered that 40% is due in that given year. And now you only end up with 6 million. But if you do, what’s called an installment sale. This is based upon IRC four 53. So your CPA knows about it and it’s known as a seller carryback and you can carry paper.

So imagine Damien, I said, David, would you carry back back a note, carry back a note for $6 million. I’ll give you a $4 million down payment. And that scenario you haven’t received all 10 million. You’ve only received four. So the government says Damon, you owe is based upon the four you received. And the other six millions in a deferral state.

You can’t, you pay tax on what you have at your received yet. So you’re in the stay until, and if you received that $6 million back, now, you might receive another million back the next, the next year, or it could be 20 years from now. You receive that. And the meantime you get interest off of that, which you pay ordinary income tax on.

But the key part is you deferred that $6 million. So fast forward to the, for sales trust. The only difference that we do is we actually bring this trust in before close of escrow. We say, Hey, Damon, I know you’re going to sell it to that, to that buyer where they’re for 10 million, but you don’t want to pay a tax.

And you say no. So how about this? We’ll have the trust jumping right before close of escrow. And it’s actually going to buy your position for 10 million, but it’s going to give you a zero down payment. And this is the heart of it. Damon, imagine you got a zero down payment. If you received zero today, Damon, how much tax is triggered?

Zero. Got it. Now the trust turns around and Peyton and sells it to that, to that buyer. And he sells it for 10 million. So we have bought it for 10 million and it’s sold it for 10 million. So if the trust bought and sold for the same price, how much gain does the trust have? You got it. Now, the buyer takes the business and he’s gone.

He’s off and running. He’s he’s doing great. And why are you happy, David? Well, you’re happy. It’s because you have the full 10 million minus some fees to us in our team, but you have that full amount you’re living off of now. Now, now, what can you do with that? Well, you might say I want to start a new business, right?

I want to go. I want to go fund my new startup. I want to buy some real estate. I want to just put it in this low, low, low stock market right now. And just jump in while the market’s low and ride this thing to the top. Um, as long as it’s investment purpose, okay. And business purpose, the IRS gives us these legal loopholes and this is the study of macroeconomics.

And basically it States it’s the government. Can incentivize the people to keep the money flowing in and out of the economy and in and out of businesses that is actually going to spur economic growth. It’s going to spur job creation and that’s going to increase the tax revenue overall. And so it’s a legal loophole, as long as you followed the guidelines, same reason that a 401k works, right?

Same reason that an IRA works, same reason that all of these legal tax loopholes work. The key is. You have to do this before close of escrow and you have to invest it into stuff that has investment purpose or business purpose. So I’ll pause there because I’ve said a lot. Yeah. So I think maybe an, an easier analogy to compare this to is why.

Amazon people say Amazon pays no tax or whatever. Big mega corporation pays no tax. And it’s not. And correct me if I’m wrong. It’s not that they’re not paying paying taxes. They have a legal loopholethat they’re reinvesting that money in. And so they’re deferring the liability of that tax payment till later until they stop reinvesting it into another business purpose.

Is that right? You got it. Yeah. It’s kind of like what Amazon does. Right. They take their earnings and they just reinvest it into R and D or creating new businesses or we’re opening up, you know, web services or opening up a, you know, Amazon video. They’re doing all these different things to grow revenue streams.

Right. And for you personally, you can do it. Similar thing by carrying paper and then investing it into other businesses such as maybe like an Amazon or whatever else. Right. And live off the income. Now you’ll pay ordinary income tax tax on the interest that it earns. So that’s, what’s maybe a little bit different than Amazon.

So you’ll see the government still getting their tax the dollars. Right. Um, but essentially it’s kind of like a zero interest loan from the government and they say, you know what, Damon, you owe us that 4 million. But tell you what, we’ll give you a zero interest loan and you can go for as long as you want, as long as you, you invest it into the economy, right.

Which is good for everybody. And when you get those interest payments, you pay tax, which you got no problem going to pay the tax that when it’s triggered, but they want to keep that money flowing. They don’t want to put it under your mattress and you just hold onto it. Right. Because that doesn’t help the economy.

So in the end, Do I end up paying the same amount of tax, but the main difference is that I also profit on the interest in the meantime. Yes. Assuming the capital gains tax rates stay consistent throughout. Right. So assuming they don’t raise those up or even lower than, I mean, they could be a tax holiday, not likely to happen, but if they did, then you’re going to pay it in that given year for the amount that you receive.

But even let’s just say this, let’s just say you had a loss, let’s say five years from now, you had a loss for $3 million on a different business or a different piece of real estate. Guess what you have this 10 million sitting here and you can pull out 3 million of the 10 and offset it with that same 3 million in that given year.

So we call that tax engineering. All right. What is it best for you Damon to pay the tax? Got it. Okay, cool. Alright. So then, um, when, when I sell the business for 10 million bucks, and if I paid it all up front, I’d a 4 million bucks give or take. Um, and, and so I’m sitting on 6 million cash essentially. Now, if we go this other route that you’re talking about, um, do I have that 10 million guarantee, or am I running a liability that the buyer ends up not.

Providing the rest of the funds at some point, like you secure those funds, right? Great question. Right? So in a traditional installment sale, you’re hitting on the number one biggest risk that you take. If you just trust one person or one group, who’s buying your company and you’re carrying all the paper for them, right.

You’re betting that they’re going to succeed. You’re betting that you don’t have to add to foreclose. You’re betting that I can run your business into the ground. Right? That’s the number one reason people don’t do a traditional installment sale. Um, It’s because of the collateral collateral, well, maybe the business or the piece of real estate, but the people who are borrowing could be of risk.

Here’s the cool thing. So we’re using the exact same foundational tax structure, which is tried and true for since 1920s. But the difference is we’re getting rid of them. How are we doing that? Because we’re inserting this trust and the funds are actually going over here and over here is a new investment account, completely severed from the buyer, the buyers.

Gone. We got the trust guy in this 10 million. He’s gone forever. Your business has gone forever, and now you can put it into stocks, bonds, and mutual funds. You could put it into real estate of your choosing. You can put in real estate with your partners or by yourself, you can put it into a brand new business startup.

Right. I can call it the go-fund yourself. So for the big tech entrepreneurs out there who are selling to the Facebooks, the Googles or the Amazons, whatever they do as they come due and they say, Hey, Dan, we’re going to give you a bunch of stock. Okay. So yeah. Buy a company for 50 million bucks. We’ll give you a bunch of stocks.

So you’re, you’re deferred here, right? And you’re not taking all of that. It wants to pay all the tax, right. But the people who are the creators or the entrepreneurs listening to this podcast, they want to go create, they don’t necessarily want to be stuck with the big Amazons or the Facebooks and the five-year non-competes and all this other stuff.

Right. They actually rather take those funds. What are we found for our clients? Put them into the deferred sales trust and say, I don’t need your stock. Just give me more cash up front, put it into my trust and then want to use those funds up to 80%. The next day can be used to fund a new startup company.

We’re used to our investment real estate, all tax deferred, by the way. And now you’ve just created a, either passive or active pile of money that you can use that can produce income based upon the interest that it produces. Right. Um, also you have more freedom and you’re not tied to any company or any banks.

Uh, that’s really what we’re about. So hopefully that makes sense. Yeah, for sure. So when should businesses care about this? Like what? Like, is this a, I assume not when they’re ready to sell, but before they’re ready to sell, or even before they’re considering selling. Correct. So we talk about planning, planning, planning, and preplanning, as much as you can, when it comes to selling your highly appreciated asset.

So what we can’t do is Damon, you call me and say, Hey, last month they just closed escrow for 10 million bucks. Can you still do this? No, no, no, no, no. We have to do this before. Close of escrow. So definitely before you’re you’re gonna, you actually close escrow. That’s the first window. But even before we say even going.

Oh, you know, listing or receiving offers because you want to make sure the buyer will cooperate and we’ll give you that language. It’s some language to put into the contract. It’s basic. It doesn’t affect the buyer in any way, but that, that establishes the placeholder because what the government wants to know is, Hey, were you planning on this or did you just throw this in the last minute?

If you throw it in the last minute, meaning all contingencies removed, they’re going to say, nah, you’re just. It’s taxable. Basically, there’s a rule that it’s going to make it taxable, but if you do preplan and you do it before they move contingencies and you add the language, then you can do it. Uh, that’s the key.

So, um, are you, are you going towards a $5 million evaluation, a $50 million evaluation? Great. Let’s start planning that today, whether you’re you’re out two years out. Um, and let’s make sure you get this very clear and you check all the boxes and you, you vet who we are and how we do it. And you have, what’s called your brain surgeons.

Come ask us the tough questions, your CPAs tax attorneys, all of those things that you’re going to be asking. Get all that out of the way. Now you check the box. Okay. I have a perfect plan for this now, your business and get the highest price and the best terms. And then when it sells, you go into the trust and everyone’s happy.

So it sounds like you are not a business broker, but can work in conjunction with them. Correct. So I actually educate financial advisors, business brokers, CPAs, high end, residential realtors, commercial real estate brokers on how to do this and how to grow their business by helping their high net worth individuals who are transacting.

So that’s the. First part of our business, the second part is direct to direct to client or direct to consumer, right? Who are actually selling their businesses. We’re going to work directly with them. Now they say, Hey, I actually need a business broker, or I need a commercial real estate broker, or I need a luxury realtor, or I need somebody.

Great. Well, we have strategic alliances, right? Thousands of professionals across the U S that we can connect you with. Our, our role is sort of like the offensive coordinator, our actual way we get paid because we’re the third party trustee, but we provide the capital gains tax solutions, clarity on the different strategies.

In particular, we focus on this one and then we just help the client. See we become a part of their team and we build all of the professionals around them so that they can create and preserve more wealth. Got it. Now is your fee a one time transaction or some sort of residual on, on the deposit or sell price or whatever?

Yeah. So there’s three sets of fees, the first fees to the tax attorneys. And that is a one time fee. It’s about 1.5% of the, of the deal. Now that’s a onetime fee. Clever’s legal and audit defense for the life of the trust, which is very important. You want to make sure whoever does. The legal work and whoever does the structure of strategy stays it’s behind their work and indemnifies and provides audit defense.

In case the IRS comes knocking our deal, by the way, thousands of clubs, 14, no change. IRS audits, 24 year track record. And not one single issue ever with the IRS or even with our returns for the investors.

Okay. So that’s the first thing, although you can’t guarantee their returns, the return in the marketplace is, is, is, is the marketplace, right?

But at least hopefully you had an extra 4 million on your deal to be a little more conservative in your allocation. So that’s the first feed, the second phase to our company. And that is basically somewhere between 50 basis. Points and 100 basis points that happens at close of escrow and it once a year thereafter for as long as the funds are in the trust

So it’s an annual recurring fee. And the last piece of the financial advisor and same thing, his is somewhere around a hundred basis points all in you’re usually about 150 basis points recurring and one and a half. Upfront. And then you have a bank account fee and you have a tax return fee, but our goals, by the way, arching net to clients somewhere around six to 8% based upon their risk tolerance, net of fees at the end of the 10 year period.

Okay. And then they can renew for another 10 years and another 10 years and keep going if they like to pass it onto their kids. Um, But really we’re hoping to out earn our fee along the way, because we’ve invested in the marketplace and then you say, okay, well, net of fees, I still have an extra 4 million by about six and a half.

Let’s say most of our notes earn eight net about six and a half. And that’s when you do the math and you say, yeah, well this, this makes a whole lot of sense. They could charge me, you know, five or six or 7% per year. Cause I still have an extra 4 million bucks, but we’re about one and a half percent ongoing per year.

Okay. And you’d mentioned 10 years. Is that kind of the average, the initial cycle that you present in these, these, uh, transactions? Correct. Exactly right. Okay. Um, so before, before we hit record you, you started giving off some random examples of capital gains. Um, give me some more of those let’s let’s run down those again.

Yeah. So those who may not know most people just think real estate, but obviously it’s business. We’ve talked about that, but it also works for Bitcoin. We’re doing Bitcoin cases, right? If somebody may, may or may not know, but if you buy Bitcoin and you sell it for a pre, uh, appreciate, uh, he appreciates it, you sell it.

It’s taxes, capital gains tax. We’re doing a horse deal at a Kentucky where people buy race horses. Yeah, by a race horse, and you, you, you know, you, you help them get stronger and they win some races. Hey, you can sell them for a profit. Okay. Um, we’ve done self storage facilities, multifamily. We’ve done orthodontists.

They’ve done dentists. They did optometrists. Um, anything that has capital gains taxes, we can defer using this strategy. Okay. And just to elaborate on that last comment, where were you kind of separate where you can help as if a transaction is already done. Right. So if the money’s already exchanged hands or if it’s an inheritance, so I’m like that totally different, totally different discussion.

Right? Exactly. Yeah. So if the deal’s already been being commenced and what’s called actual or constructive receipt meeting, the funds have been sent to your personal bank account, um, from escrow to you, it’s too late. The government says, yep. The USR tax. I love how enthusiastic you are, like in your role of the government.

Yep. That’s how it is. Just cough it up. Happy to take it, you know, and I guess there’s a lot of good Americans who need to pay down the $23 trillion of debt. You know, I’m being facetious there, but no, really what we’re about is. Keeping the wealth in our families and keeping the wealth in our communities.

So we can give more to those who mostly need. We believe that the, uh, the wealth and the power of the people, uh, they’re smarter to do with it, and then what the government is to do with it. Right. And so that’s the key here. That’s the goal here. And just to give you guys a few stats on what’s happening right now, there’s about 17 to $20 trillion.

That’ll pass from one generation to the next and the next 20 years. And this is known as the largest wealth transfer in the history of the planet. And it’s happening right now for these baby boomers who are a lot of our parents statement, your parents, and I’s right. Who there’s about 17. Um, there’s about 10,000 baby boomers everyday turning 65.

And there’s about 77 million in the U S alone. And they’re challenged with how do they sell out? Toilets trash and liability. How do they retire from their business and how do they get time? Travel, liquidity, diversification, and debt freedom. And they don’t know how to sell without getting wiped out by the 30 to 50% in capital gains tax.

So this is huge amount of wealth that’s transferring and this, this, we can help them out. We can help them out. Why do we want to help them out? So that we can give more to families charities if they want to, or just for their own family. Right. Rather than paying to our government. That was, again, let’s be honest.

They will waste it away and about, you know, your 10 million, let’s just say you’re 4 million that you pay in tax. That’ll probably go out and about, I don’t know, maybe 20 seconds right on the, on the debt clock. Sure. Yeah. Well, not that we define that as losing you define winning is tax deferral. We define losing is paying the tax and we just want to provide this, be your guide to help you with this.

But the math makes sense. Like once you do the math, you’re like, Oh, this makes sense. Let’s just do it. Right. But that’s for you to decide and we want it. We want to educate you along the way. Yeah. What’s your background? How did you get it? What were you doing before this. Quick question. So in 2006 to 2010, I was at a company called Marcus and Millichap, and I was studying and helping people buy and sell investment real estate.

Now at the time I was kinda new to the whole business and I was actually kinda just married and just had a first baby on the way. And the marketplace completely crashed. Right. And when it crashed, I was trying to make a living, just trying to support my family. Trying to find a way to make it in the business.

Keep my dream alive, be an entrepreneur, but unfortunately, um, the marketplace was tough and, but I had to get creative. So I did what every good preneur does. I wouldn’t get my side job at cheesecake factory working nights and weekends. And I started working a third job at a basketball tournament before and after school at my local college that I played basketball at and fast forward.

After two years of grinding through, I also was looking for creative ways to help clients to never have to face with it. They faced, which was some lost everything and the Oh eight crashes. Why? Because they had too much debt. Right. And they had too much liability. They did. What’s called a 10 31 exchange for your listeners who are listening.

May have heard of that before we could buy real estate, sell it and do a 10 31 exchange and defer the tax. So I said, how do I help our friends and family and clients never have to face what they just faced. Okay. Uh, working 20, 30, 40 years and losing everything because they felt they were forced to overpay in a strict, strict time period via 10 31 exchange.

And so we set out on a mission to, to provide that and along the way, A gentleman came in and spoke about a deferred sales charge. Who’s now my business partner and we sat there saying this is too good to be true. There’s there’s no way we haven’t heard about this. Why doesn’t everyone know about this?

Right. Why doesn’t my CPA? Tell me about this. But that started my journey, curiosity and learning it. And I call it, poking the bear to make sure this thing is real and it works. But the more I learned about it, the more it became real. And the more it actually worked, the more clients ever referred to it, it worked and everyone keeps everyone’s happy if it’s working, it’s working great.

Also, it allowed me to grow my business personally. Right. So all of a sudden I can come in and I could actually add more value to clients who are looking for a solution. So now I can support my family. I can make it in the business. And so. That’s kinda my journey there. And then we just launched capital gains tax solutions because we said there’s, there’s no one who’s really out there educating on this such practical level with this strategy.

And yeah, that’s my story is, is any of your emotional ties to the 2008 crash reminiscent in what’s going on with what the world today? Unfortunately. Yes. And it’s very sad and we’ve kind of been saying it for a while. Now that we’re in this, you know, we were in a 10 to 12 year bull market run with the economy and that, although there wasn’t any sign, we knew something historically could happen.

And it usually does happen within that time period. And now it’s happened and. Nobody saw it coming. It’s usually usually kind of what happens even even Oh eight crisis. Most people didn’t see it coming and now it’s here and now people are getting hurt and especially those who are in too much debt and overextend it and not diversified.

And they’ll have liquidity. Right. And so, so that’s where, where we, we can’t get the message out fast enough. Right. We want to help people sell right now, or they still have equity get out of debt. Why they still can, right. Defer all the tax and then diversify within multiple places, multiple income streams or multiple, uh, locations.

And that reduces their risk. Right. And we don’t, we don’t want as people. Stay in these single properties or single locations or single asset classes and everything is just dependent upon that. And if that doesn’t go so well, guess what, you could be bankrupt or foreclosed on. And that’s what I saw. So unfortunately, yeah, it’s happening kind of all over again.

A lot of ways. I’m hoping that it, it gets, it gets cleared up real fast, but so far it’s not looking too good. Yeah. Well, um, it’s um, hopefully I agree. Hopefully it turns on quicker, sooner than later. Um, Okay. I think we’re, we’re preaching to the choir. Everyone’s kind of in the same boat right now. So, well, Brett, I think it’s been really interesting conversation.

It’s been really good. I didn’t know anything. I didn’t know a lot of things I didn’t know about, um, this solution in its entirety. I didn’t know the ties to Obamacare. Um, so I appreciate you coming on and sharing all this information. If people want to hear and find out more, you know, give us your contact information.

How can people follow up with you? Yeah, thanks Damon, for having me on the show and thanks everyone for listening, or they can find me at capitalgainstaxsolutions.com. They can also search our YouTube page for that as well. LinkedIn, we have a brand new podcast called capital gains tax solutions podcast that we are launching and, uh, love to have Damon on the show too, if you wanna be on the show.

And so yes, character exists there. We have, we have one on one free consultations, by the way, we don’t charge anything in less than if you close the deal. So we have the education for you to look at. Kick the tires you have the deferred sales trust calculator there. We have a free guide. It’s called escape.

Feeling trapped by capital gains tax. If you go there, you can download that free guide and get started on your capital gains tax journey today. Super cool. I appreciate it. Brett Swarts. Thanks for joining learning from others. Appreciate it. Thanks.

What did you think of this podcast?

Brett Swarts: Protecting Wealth When Selling a Business

Get Notified of New Episodes

Get notified when we release a new podcast with another successful entrepreneur.

You have Successfully Subscribed!