Brett Swarts
Brett Swarts has been a guest on Collecting Keys, the real estate investing podcast hosted by Mike DeHaan, Dan Austin and Dylan Koch.
How to Pay Zero Taxes on Massive Gains with Brett Swarts
Brett Swarts of Capital Gains Tax Solutions explains the deferred sales trust as an alternative to the 1031 exchange, including who qualifies, how the installment-sale structure works under IRC 453, and how the funds can be invested afterward. He also walks through his path from Marcus & Millichap and night shifts at Cheesecake Factory to passive commercial investing, and shares how he vets operators and deals.
Key takeaways
- A deferred sales trust works by selling the asset to a trust in exchange for a promissory note, so the seller never takes constructive receipt and the gain stays deferred under IRC 453 — unlike a 1031, there is no 45/180-day clock and no requirement to buy like-kind property.
- Brett's rule of thumb for who qualifies: roughly $1 million in net proceeds or gain (which can be combined from two positions), because the tax bill needs to be large enough to justify the structure.
- The trust can hold proceeds from primary homes, businesses, LP/GP interests, artwork, collectibles, NFTs and crypto — he details an Ethereum client who exited $5M through Kraken and avoided losses when Celsius collapsed.
- Notes are typically structured on 10-year terms (also 3 or 5), interest-only around 8%, with clients often drawing 5-6%. Interest is taxed as ordinary income on a 1099; dipping into principal triggers capital gains on that amount.