Asset Protection Services of America Trust Pay No Capital Gains Tax
By Jay Butler
While some individuals and couples might escape low capital gains taxation under the new 2026 thresholds, most all investors will incur a capital gains tax liability upon the sale of an investment property.
The Scenario
So, in our scenario,“ Bob” previously invested into a duplex. At the time of his purchase, he put $ 200,000 down toward his $ 500,000 acquisition. Over the years he invested another $ 200,000 improving the two units and eventually tookback $ 200,000 in depreciation. The property values continued to grow in his area and, when he decided to sell, the duplex had appreciated to $ 1.5 Million in value. Bob contemplated his $ 1 million in longterm capital gains tax dilemma and asked himself,“ Could there be a way to legally and lawfully avoid paying any capital gains tax?” He would soon realize the answer was“ yes”.
On a side note, prior to purchasing, Bob had considered using a SelfDirected IRA or Roth to build his real estate portfolio but elected not to take advantage of either. The minor costs involved in establishing an LLC structure and paying annual custodial services were not a deterrent. Even risks of turning the entire retirement account into a taxable event because of a selfdealing or prohibited transaction were not insurmountable. But the taxes would still come due for the SelfDirect IRA as they were withdrawn during retirement and, for the Roth, taxes would have already been paid going in. It’ s not that either option was inherently bad, but neither choice was fully ideal and so he left the property in his name.
Back to today, depending on his marital status and tax filing election, Bob was looking at paying a substantial amount in longterm capital gains tax under the new 2026 thresholds and he wasn’ t keen on relinquishing it. Bob considered utilizing a 1031 exchange at the time of the sale but, while that was an intriguing idea, he would be forced to invest into another property of likekind in a limited period of time. He needed a way to invest freely, as he saw fit, without all of the rules, risks and restrictions. Bob wanted to paydown debt on other properties he held, reducing stress and increasing cashflow. He also wanted to diversify his investments into precious metals and cryptocurrency, and desired to help his children with their college education and medical bills. Being tiedup in yet another real estate investment until retirement wasn’ t going to help him accomplish his goals either.
The Solution
Bob chose to seek other existing solutions, and discovered the Benson Financial Irrevocable Spendthrift Trust. When he read the Legal Opinion drafted for an authorized agent Asset Protection Services of America Trust, he realized the answers he needed could be found within their proprietary trust instrument. Bob learned the original trust documents were drafted by two attorneys and Harvard School of Law professors. The first, Austin Wakeman Scott, authored the ninebook volume“ Scott on Trusts” recognized as the leading treatise and authority on trust law in America. And the second, his protege’ Robert N. Benson, an experienced attorney who worked with a prominent wall street law firm providing legal acumen to highnetworth individuals.
Their combined knowledge and experience enabled them to draft a trust based on contract law, established entirely upon the constitutional laws of our nation. Not only was their unique trust structure legal and lawful to the core, its very essence was rooted in the Internal Revenue Code and Treasury Regulations, and is supported by case law. Infact, their trust documents were Copyrighted in 1999 as an original work. The Copyright Office duly noted that it was the first and only trust in American history to have ever been copyrighted. Having never heard of such a thing, Bob was encouraged to know the trust had already been in use for over halfacentury. Nobody wants to be a guinea pig. Knowing over 125,000 other clients had successfully made use of the trust before him( over a period of 53years without ever having lost an audit), gave Bob the peaceofmind and sufficient courage to move forward.
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