In this episode of Leaders and Legacies, Craig Andrews speaks with Brett Swarts, founder of Capital Gains Tax Solutions, about what leadership looks like when business owners think beyond today.

Brett makes the case that strong leaders plan for exits long before they happen. Most owners focus on growth, customers, and operations, but fail to prepare for the financial reality of selling. That lack of foresight can cost 20–50% of their wealth in capital gains taxes.

Brett explains why leadership is about optionality—building a business that can run without you, scale cleanly, and exit efficiently. He walks through how disciplined planning, clear systems, and early tax strategy protect both families and legacies.

The conversation also explores why many owners delay planning until a health crisis or unexpected offer forces a rushed decision. Brett argues that leaders who slow down, ask better questions, and plan early create leverage, not pressure.

This episode is a must-listen for founders and advisors who want leadership decisions today to compound into freedom tomorrow.

Want to learn more about Brett Swarts' work? Check out their website at https://capitalgainstaxsolutions.com/.

Connect with Brett Swarts on LinkedIn at https://www.linkedin.com/in/brett-swarts/.

Key Points & Time Stamps

• [00:01–02:27] The three inevitable outcomes for every business owner
• [02:27–03:38] Why most owners wait too long to plan their exit
• [03:41–04:53] Leadership means building a business that can run without you
• [05:51–06:41] Why tax planning is often ignored until it’s too late
• [07:06–08:09] The limits of 1031 exchanges and why owners feel trapped
• [09:40–11:19] How lack of planning silently gives the government equity
• [14:59–18:56] Using installment sales and trusts to reduce risk and taxes
• [21:13–22:31] Leadership lessons from estate planning and generational wealth
• [23:44–24:31] Brett’s mission to help owners avoid the capital gains tax trap

Transcript

00;00;05;20 - 00;00;30;20
Craig Andrews
I was in a coma for six weeks while the doctors told my wife I was going to die. When I woke up, she told me the most fantastic story. My team kept running the business without me. Freelancers reached out to my team and said, we will do whatever it takes. As long as Craig's in the hospital. I consider that the greatest accomplishment in my career.

00;00;30;23 - 00;00;51;18
Craig Andrews
My name is Craig Andrews and this is the Leaders and Legacies podcast where we talk to leaders creating an impact beyond themselves. At the end of today's interview, I'll tell you how you can be the next leader featured on this show.

00;00;51;20 - 00;01;04;11
Craig Andrews
Today I want to welcome Brett Swarts. He is the founder of Capital Gains Tax Solutions. If you are a business owner, one of two things one of three things are going to happen.

00;01;04;14 - 00;01;08;12
Craig Andrews
You're either going to go out of business or you're going to pass,

00;01;08;12 - 00;01;13;04
Craig Andrews
the business off to one of your kids, or you're going to sell the business.

00;01;13;07 - 00;01;27;28
Craig Andrews
And if you sell the business, you've got a hopefully a ton of capital gains coming your way. Brett helps business owners minimize capital gains tax upon exit. Brett. Welcome.

00;01;28;01 - 00;01;30;16
Brett Swarts
Craig. Thank you for having me. Grateful to be here.

00;01;30;18 - 00;01;37;18
Craig Andrews
First let me let me check that. I mean, I just kind of made that up on the fly that there were three things that would happen. Was am I missing a scenario there?

00;01;37;20 - 00;01;55;28
Brett Swarts
I think that's pretty spot on, probably for 90, 95% of it you might sell it to a partner is sometimes someone that maybe missed there. You might sell it where you partially sell it to like a large, you know, company that's kind of gobbling up some of the smaller, the medium size, you know, businesses. And you might stay on,

00;01;56;01 - 00;01;57;05
Brett Swarts
for a period of time.

00;01;57;05 - 00;02;01;16
Brett Swarts
And so just notice it's a little bit of a mix. It may not be all all at once.

00;02;01;19 - 00;02;27;09
Craig Andrews
Yeah. But you know, one of the things that I hear, you know, I've talked to a lot of exit planners and their number one complaint is people come to them and they say, hey, I'm going to sell my business this year. I need you to help me sell it. And they haven't been doing the things they should be doing for the last five years to get ready to sell it.

00;02;27;11 - 00;02;35;18
Craig Andrews
And I would imagine one of those things is actually having a plan to handle the capital gains tax.

00;02;35;20 - 00;02;56;19
Brett Swarts
You're spot on. Right. And I think that's part of the challenge for on a small to medium is business owners. They either operationally or with people or systems and process and getting getting out of out of the business to even to be able to sell without being the pivotal point that needs to stay on for a long time, is one of the biggest challenges any business owner faces as they scale.

00;02;56;21 - 00;03;07;21
Brett Swarts
And then, of course, the other side of it. And that's part of why I think oftentimes they either miss it or just are overwhelmed that they don't necessarily plan to sell or think they're ever going to sell

00;03;07;25 - 00;03;16;23
Brett Swarts
until a health crisis or a death or divorce or, or something that is really going to drive that change. And it can happen overnight.

00;03;16;23 - 00;03;26;09
Brett Swarts
And or that call just comes in and you're like, wow, I didn't realize my business was worth this much, and maybe I do want to sell. And now they're down the road.

00;03;26;14 - 00;03;38;26
Brett Swarts
And, and then it's just focus on getting it across the finish line. And, and if they don't plan or have a, you know, have a real clear way to exit with the capital gains tax, then they just end up paying it, which is kind of sad.

00;03;38;29 - 00;03;41;04
Craig Andrews
Well, and I think one of the,

00;03;41;07 - 00;04;04;03
Craig Andrews
one of the problems with the way the thing, you know, because there's a lot of people, oh, I'll never sell and but, you know, whether it's exit planning or tax planning, you know, in terms of it, to me it seems like you should always be building the enterprise value of your company, regardless of whether you're going to sell, because basically, if you don't sell, you're selling it to yourself.

00;04;04;03 - 00;04;15;22
Craig Andrews
The the thing that's going to drive the valuation of the company is based on how much, how profitable it is and how much it can run on its own. And I think you want both.

00;04;15;24 - 00;04;22;11
Brett Swarts
I could agree more, right? I mean, I think we all want options. And I think if you build it to sell, you're probably going to build it in a more,

00;04;22;18 - 00;04;44;21
Brett Swarts
I don't know, a proper ways, a way to say it, but it's the you're going to have it, you know, clear set of books, clear set of projections and budgets in performance, clear set of CRM, clear set of contracts, clear set of all of these things that go into making it attractive for a bank to finance the buyer who's buying it and make it attractive for the buyer to pay an equitable price for your for your business.

00;04;44;21 - 00;04;49;02
Brett Swarts
And so I think, you know, starting with the end in mind, building it to sell it,

00;04;49;05 - 00;04;53;00
Brett Swarts
that is I think the in the best way to do it.

00;04;53;03 - 00;05;15;06
Craig Andrews
Now when they're doing this, I mean, I've talked to a lot of exit planners and, you know, they tell me things. I mean, like, here's one of the things that was most surprising to me. They said, don't take a ton of distributions out of your company. If you plan to sell. And the reason is investors look at that and they say, oh, you're saying that your business is not the best thing to invest in.

00;05;15;08 - 00;05;19;28
Craig Andrews
You I think, you know, you're taking the distributions out and you're putting them in, you know, and

00;05;19;28 - 00;05;29;19
Craig Andrews
you know, let's say the stock market or something. You're saying the stock market gives better returns in your business. Well, we can go buy stocks in the, you know, stock market.

00;05;29;24 - 00;05;32;28
Craig Andrews
But those are the type of things I hear.

00;05;33;01 - 00;05;51;17
Craig Andrews
I'll be honest, I haven't had a lot of conversations about the tax planning, the the exit planning from a tax perspective. Actually, this may be the first I've had. I mean, the yeah, I don't think I've had any discussions from a tax perspective.

00;05;51;20 - 00;06;19;02
Brett Swarts
Yeah. I mean, what's really interesting is it's like you don't think about it until you I think you need it. Right. Or or you the awareness of it. I think it's just the business owner is so focused on driving and serving their customers and their passion. Right. I think, you know, sometimes taxes are an afterthought from the from your accountant who's filing your taxes to the section 179, you know, truck that you part right off and you don't think about that a little bit there.

00;06;19;04 - 00;06;29;00
Brett Swarts
If you happen to be investing in some real estate on the side, you may know about a 1031 exchange told me with a diverse and tax. But I think it's just hard sometimes if you don't have a team in place,

00;06;29;05 - 00;06;30;09
Brett Swarts
that's helping you,

00;06;30;09 - 00;06;36;13
Brett Swarts
have awareness for this. So I think slowing down and, and being thoughtful are the things that are the,

00;06;36;16 - 00;06;41;04
Brett Swarts
are the things that I think most business owners should do on, on the any major decisions.

00;06;41;05 - 00;06;52;16
Brett Swarts
I think it's another way to think about it. You know, if you're gonna buy another business next door, you're going to make sure you do due diligence. I think the same issue, do the same due diligence on your on yourself for the exit for the tax piece.

00;06;52;19 - 00;06;56;02
Craig Andrews
So you just said something about 1030 ones.

00;06;56;05 - 00;07;06;19
Craig Andrews
Ask somebody this recently and they didn't really know. Could you, can you take any type of capital gains and process it through a 1031. Or is it have to be capital gain on real estate.

00;07;06;21 - 00;07;20;00
Brett Swarts
So it used to be things like helicopters and jets and business sales. But more recently in the last couple of years it's been it's been shrunk down to just investment real estate. And so as you know, most businesses,

00;07;20;03 - 00;07;34;12
Brett Swarts
and they may have a real estate component that, that, that they can sell. And that's there's some strategy there that it may they find surprising that you could, attach it more to the real estate and get maybe get higher valuation there and a little bit lower on the business is something that's kind of a strategy.

00;07;34;12 - 00;07;36;29
Brett Swarts
And then you can try to 1031 out of that.

00;07;37;02 - 00;07;58;09
Brett Swarts
If it's, you know, within commercial reasonable types of things, check with your CPA on that. But, but unfortunately it's only invest in real estate now. So it must you must only you can only do that. And that's part of the challenge that most of these owners are facing, business owners especially because they're like, well, if I sell, 20 to 50% is crushed, maybe I should just hold on.

00;07;58;11 - 00;08;09;24
Brett Swarts
You know, maybe I should just let it kind of coast because I can't imagine, you know, the tax being gone on it. So that's kind of the, the rock and a hard place that a lot of them are faced with.

00;08;09;27 - 00;08;13;22
Craig Andrews
And for those that don't know that, 1031 is what is 1031?

00;08;13;24 - 00;08;30;27
Brett Swarts
Yeah. So think of it as a way for you to trade by selling investment, real estate and basically trading it and moving it into another investment, real estate property within a short period of time to defer the capital gains tax to kick the can on the tax.

00;08;31;00 - 00;08;32;20
Brett Swarts
And it's a nice it's a nice way to build wealth.

00;08;32;20 - 00;08;53;04
Brett Swarts
If you can find a deal some some some, some, some restrictions, you have to make sure you buy something within 180 days of selling the property is sold. And make sure you identify those properties within 45 days. So you have to follow these timelines. But but it's, it's a way it's a continuity strategy to continue in owning investment real estate.

00;08;53;04 - 00;09;11;16
Brett Swarts
It's a way for the government to say, you know what? Craig, you did a great job for those 55 units in Austin, Texas. You know, I think you can do a great job with 110 units in Dallas. You know, won't you be that landlord that provides great housing? So we'll incentivize you to sell that 55 unit, move up to 110 units and provide housing for 110 people in a in a meaningful way.

00;09;11;16 - 00;09;16;27
Brett Swarts
Right. So they tax incentivize you to keep keep it going. Keep it going. Right. Keep going.

00;09;17;00 - 00;09;18;07
Craig Andrews
Okay.

00;09;18;10 - 00;09;19;26
Craig Andrews
Interesting. When when did they change it?

00;09;20;04 - 00;09;21;11
Craig Andrews
Generic. I think it was.

00;09;21;16 - 00;09;25;01
Brett Swarts
Three or 4 or 5 years ago. So it's been pretty. Yeah. Pretty.

00;09;25;04 - 00;09;33;11
Brett Swarts
I think it was the first Trump administration, honestly. Somewhere, somewhere around there. So it was even a yes, like five, five, six years ago.

00;09;33;13 - 00;09;40;23
Craig Andrews
Wow. Well, as somebody ran their business, what are some things they should start thinking about?

00;09;40;25 - 00;09;49;17
Brett Swarts
So if they're planning on exiting. Right. Just, just just having and doing their research on what options are available. And I think,

00;09;49;19 - 00;09;55;13
Brett Swarts
it's good to clarify what matters the most to you for the season of life. Right. And this next season of life,

00;09;55;17 - 00;10;01;28
Brett Swarts
the largest world trade in the history of the planets set to happen now in the next 5 to 10 years, about $124 trillion.

00;10;02;00 - 00;10;22;24
Brett Swarts
There's about 80 million baby boomers in the US alone. Every single day, 10,000 are turning 65. And then there's another stat that says 50% of all wealth in America is tied to high end primary homes, private equity, which is businesses and commercial real estate. Right. And a lot of the listeners might have a bit of all three of those.

00;10;22;24 - 00;10;41;12
Brett Swarts
Right. And most likely they would if they're small to medium size, you know, business owners. And so knowing that this transfer and if you're a baby boomer listen to this is you're probably in the throes of potentially selling and exiting. And now's a great time to to build that momentum plan so that the government doesn't,

00;10;41;12 - 00;10;43;05
Brett Swarts
you know, take 20 to 50%.

00;10;43;05 - 00;10;45;27
Brett Swarts
And so I think that's the thing that's really,

00;10;45;27 - 00;10;49;04
Brett Swarts
important for each business owner to be thinking about.

00;10;49;07 - 00;10;57;22
Brett Swarts
You know, another way to think about it, Craig, if you and I knew that we had a 20 to 50% owner day one when we started our businesses, right. How and if there's a way to

00;10;57;24 - 00;10;59;21
Brett Swarts
to, you own 100% ourselves.

00;10;59;26 - 00;11;15;03
Brett Swarts
We had had been thinking of that for since we started our business. Right. You know. Oh, is there a way for me to strategize this where they don't have to be 20 to 50% owner? But that's kind of like what happens if you don't do the planning. You just weren't aware that there were the 20 to 50% or the whole time.

00;11;15;06 - 00;11;19;14
Brett Swarts
And they're ready to to take their share, their, their fair share. Okay. Right.

00;11;19;17 - 00;11;30;03
Brett Swarts
When you exit. Right. So but with planning. Yeah. They don't they can be deferred on that fair share. Right. Which can be in momentum for your family.

00;11;30;05 - 00;11;32;21
Craig Andrews
Yeah. Yeah.

00;11;32;23 - 00;11;37;13
Craig Andrews
You know, one of the quotes that's coming to mind as you talk, it's from Sam Walton's book,

00;11;37;16 - 00;11;58;26
Craig Andrews
Made in America. And he said he's found the best way to avoid taxes is to give it away before it's worth anything. And so he divided up the shares. Walmart put them in a family trust back when Walmart, before Walmart was even public.

00;11;58;28 - 00;12;07;12
Craig Andrews
The, the impact was there was, you know, when they were publishing the top ten list, top ten most wealthy people in the country,

00;12;07;15 - 00;12;13;21
Craig Andrews
there were four of them that were Waltons, and they were each worth like 10 billion. Exactly. They all had exactly the same net worth.

00;12;13;23 - 00;12;19;23
Brett Swarts
Get for those kids, man, that actually speaks volumes, that they're all worth the same after all these years.

00;12;19;25 - 00;12;30;27
Craig Andrews
Well, they've they've dropped down and what have you I don't and I certainly don't think the kids have carried on the legacy that Sam had. You know, Walmart used to be a delightful experience. Now it sucks.

00;12;31;00 - 00;12;47;16
Brett Swarts
It's it's another podcast. Yeah. If you have that foresight, for sure. There's another one called QBs. It's actually a very attractive one. If you can a move your S Corp to a C corporate to start out as a C corp. In the beginning, own it for at least five years. I think it's up to like 15 million now.

00;12;47;16 - 00;13;05;00
Brett Swarts
That's tax free. So that's a low hanging fruit one. Like if you feel like you're going to be going for the next five plus years, at least, you know, what could you do now? Tell your CPA there's tax consequences. All these different things that are involved with why or why you do or don't do that. And there's certain limitations around employees.

00;13;05;00 - 00;13;14;01
Brett Swarts
You can have different things and different revenues. But for small to medium sized businesses, most people listening probably could qualify. And if you're going to hold it, if it's less than that, then,

00;13;14;01 - 00;13;21;01
Brett Swarts
you make it like a portion of that. I think if you do it for half of the time, you can get maybe, you know, half of the 15 million tax free.

00;13;21;03 - 00;13;22;16
Brett Swarts
But that's a pretty sweet one there,

00;13;22;16 - 00;13;25;19
Brett Swarts
that I like, you know, to share with people. That's pretty cool.

00;13;25;22 - 00;13;33;05
Craig Andrews
So that's interesting. I mean, I had an exit out of the C Corp and,

00;13;33;05 - 00;13;37;20
Craig Andrews
paid a ton in taxes, you know, capital gains taxes.

00;13;37;23 - 00;13;47;18
Craig Andrews
And was less, you know, my, my portion was less than 15 million. This a new law? Was this,

00;13;47;20 - 00;13;52;27
Brett Swarts
So I've only really recently learned about it in the past few years. Just do my studies of,

00;13;53;00 - 00;13;59;16
Brett Swarts
for for what we do here, our company. But,

00;13;59;19 - 00;14;05;12
Brett Swarts
Yeah. Good question. As far as as far as when it kind of became popular,

00;14;05;18 - 00;14;10;12
Brett Swarts
I would just say I just have heard and know that it works. Well,

00;14;10;15 - 00;14;13;13
Brett Swarts
and you can limit it up to 100% of the federal capital gains tax.

00;14;13;15 - 00;14;20;06
Brett Swarts
So I think the state is separate from that. You need to be aware of that. I think there's and there's there's

00;14;20;06 - 00;14;28;09
Brett Swarts
yeah. So I would just look that up, just look it up into who. Quite frankly we don't we don't execute on those. Right. This is this is just something that,

00;14;28;12 - 00;14;41;10
Brett Swarts
you know, I think it's nice to know that there's other options out there if you have a little bit of planning, but this but that is one of them that we definitely respect, just like we respect the 1031.

00;14;41;13 - 00;14;42;25
Brett Swarts
But we don't necessarily,

00;14;42;25 - 00;14;47;18
Brett Swarts
do the shops. And so I'm not necessarily expert there. I just know those are some of the parameters.

00;14;47;21 - 00;14;50;12
Craig Andrews
Okay. All right.

00;14;50;15 - 00;14;59;21
Craig Andrews
What so what are some what are some typical strategies for somebody that's exiting their business or to get them to exit their business without getting walloped by taxes? Yeah.

00;14;59;21 - 00;15;20;14
Brett Swarts
The one that I think is maybe less known as the installment sale method with a trust, most business owners have probably heard of an installment sale, or they noticed a seller carry back where they became the bank for the buyer. In other words, they can finance the buyer who's buying their business. And and this is this is an installment sale method that goes back over 100 years.

00;15;20;16 - 00;15;33;13
Brett Swarts
The challenge with that is, if you think about it, Craig, if you sell on an installment, the worst nightmare would be two years later. The guy or the gal who bought your business is not performing, and you need to foreclose and take it all back again.

00;15;33;15 - 00;15;34;11
Craig Andrews
Right?

00;15;34;13 - 00;15;51;27
Brett Swarts
And you're like, oh my gosh, just when I got comfortable. Right. And so you're in other words, you're putting your trust and all of the capital from that or a lot of the capital to that new buyer and, and then that business that you're, you know, selling to get away from. And so but the concept makes sense, right.

00;15;51;29 - 00;16;09;15
Brett Swarts
You delay paying tax until you receive payment from the actual sale. And so let's give you an example. Let's say a $10 million business sale in California. You know, and you would you're going to pay 3.7 million of tax, which would be state and federal. And,

00;16;09;15 - 00;16;13;29
Brett Swarts
you know, the zero basis, right? If you did 100% carry back with the buyer.

00;16;13;29 - 00;16;23;27
Brett Swarts
I mean, when you took no payment at the closing, all that's deferred. And let's just say you put a 9% interest rate on that note and you just get 900,000 a year.

00;16;24;00 - 00;16;29;17
Brett Swarts
That 10 million just keeps working for you in that scenario. And the 900 just keeps coming in. And for a lot of people are like sweet.

00;16;29;17 - 00;16;53;20
Brett Swarts
That's really all I want. I didn't necessarily want all 10 million all at closing to spend on my boat and my home and all these different things. And so I like to just, you know, 100% finance it, get 9% coming in every year, live off 900,000, just sail into the sunset. And if I just came every year and I have to trade the time that, you know, or the the any of the stress that takes to own a business or run a business, then that'd be great.

00;16;53;23 - 00;17;09;09
Brett Swarts
The downside, again, of course, is you did that with the buyer is they may or may not pay on time. They may or may not run the business into the ground. You may or may not need to foreclose, secure your the collateral to you know, to be able to pay you back. But the concept has been there and we know that.

00;17;09;09 - 00;17;13;25
Brett Swarts
And most of the time people are going to finance 100%. They'll finance 20 or 30 or something like that.

00;17;13;28 - 00;17;23;26
Brett Swarts
And most time they're doing it to boost the price because the bank is only willing to land at a certain amount. So they kind of cover that gap. And so there's some there's some different things here, but the concept makes sense.

00;17;23;26 - 00;17;29;27
Brett Swarts
And so what's surprising is you can add a trust to this. And you know, trust are very

00;17;29;29 - 00;17;36;24
Brett Swarts
also maybe not as well known for people. Most people think trust like a living trust or for probate and passing my assets,

00;17;36;28 - 00;17;42;13
Brett Swarts
and putting them in this living trust so that I make sure the assets are passed appropriately to my kids or my children or wherever.

00;17;42;16 - 00;18;04;10
Brett Swarts
But there's another type of trust called a business trust, where you can combine the business trust with an installment sale method that we're talking about. And you can have a third party trustee, and you can first sell your business to that trust in exchange for a promissory note. And then immediately the trust sells it to the buyer. It has the 10 million lined up.

00;18;04;12 - 00;18;30;06
Brett Swarts
Just a simultaneous close. Smoke clears. The funds are at Charles Schwab which can be invested in anything. The biggest companies in the world right, can also be invested into other real estate ventures. That with you with the partners and the. And then you're still owed that 9%. But now your collateral is with Home Depot, Walmart, Costco, whatever, Tesla, Apple, whatever you want to use.

00;18;30;06 - 00;18;51;06
Brett Swarts
Nvidia. Right. And and then and and so you're much more secure right. You're also liquidity. There's liquidity there. You also might want to go back into your own business or own real estate deal. Or the trust can be that joint venture partner to go with you on that next deal. In other words, you're no longer tied to the old business and you're actually diversified and you actually have,

00;18;51;08 - 00;18;51;23
Brett Swarts
you know,

00;18;51;23 - 00;18;55;00
Brett Swarts
just more freedom to, to do your, to do your next,

00;18;55;00 - 00;18;56;13
Brett Swarts
your next venture.

00;18;56;15 - 00;19;05;01
Craig Andrews
Well, you know, it's, it's I've, I mean, I've never heard of these things before. It's fascinating.

00;19;05;04 - 00;19;19;22
Craig Andrews
Yeah. Just the different levers. Could you do a combination of the, the leaseback and a trust or the, you know, the deferred sale and the trust?

00;19;19;24 - 00;19;46;09
Brett Swarts
Yeah, the seller carry and also our strategy. Yeah. Or that strategy. Right. So the answer is yes. Like you. So we've had sales of properties and assets where I say 10 or 20% is a regular seller carry and then the rest of it, let's say 80% is into this installment sale with the business trust. Yeah. The combo. And then that, that 20% in a year or 2 or 3 is going to be paid off.

00;19;46;09 - 00;20;08;24
Brett Swarts
Or it's the second bite of an apple, meaning they sold on a 6040 deal. They sold 60% of the business, another 40%. They rolled into the NewCo. Right. And now that 40% turns into, you know, 3 or 4 x. The beauty of this strategy is they can receive the trust, can receive all of those tranches at different times and issue multiple promissory notes.

00;20;08;26 - 00;20;39;22
Brett Swarts
And so the idea is you're becoming a bank. It's like the bank of Craig Andrews. Right. And you lent it to this trust, but you didn't lend it to the ultimate buyer because you were able to diversify. And every time the the new the new parts, it and you also have other real estate that you sold. You may have some bitcoin or some stock, all these different assets, but it could be one trust that just keeps receiving and issuing promissory notes, multiple promissory notes one trust.

00;20;39;24 - 00;21;02;17
Brett Swarts
Slight limitations though, if you're married, if 10 million per calendar year basically to to put into this trust technically you can do like a deal on 1228 deal on January 2nd. Right. So you could you could do a little bit of that in this new calendar years. And you can get 20 million. Right. There's a second version that's not limited to that that to the amounts.

00;21;02;17 - 00;21;13;27
Brett Swarts
It can be 100 million $1 billion deal. That's really it's an irrevocable trust version. And it's to really solve for what's called the death tax, which is another thing that a lot of,

00;21;14;01 - 00;21;24;20
Brett Swarts
small and medium business owners don't necessarily account for because they mistake the stepped up basis as a way to solve for that. Meaning I just die and I kids get to the basis they can do whatever they want.

00;21;24;20 - 00;21;31;08
Brett Swarts
Well, that's true if if as long as you're less than 30 million net worth.

00;21;31;11 - 00;21;45;25
Brett Swarts
Married or 15 million net worth single. But beyond that you have a death tax issue and the the show. That's brilliant for this Craig is if you've seen it yellow lives in Yellowstone.

00;21;45;28 - 00;21;46;26
Craig Andrews
Yeah. Yeah.

00;21;46;28 - 00;21;56;05
Brett Swarts
Never. Kevin Costner I think is Mr. Dutton, you know, and there's Beth and that is like, dad, sell the farm because they're going to kill you. And,

00;21;56;05 - 00;22;07;14
Brett Swarts
and he's like, I'm never selling the farm because. But, dad, if you don't sell the farm and they kill you, the death tax is going to kick. And she literally says it, and they're going to take it anyways because we can't afford $400 million.

00;22;07;14 - 00;22;31;19
Brett Swarts
And then imagine it's $1 billion business and we can't afford that tax bill and they're going to take it anyways. He's like, I'm never selling the land. And so what Mr. Dutton could and should have done before he died is sold. And then move it into what's what's known as an irrevocable trust that's connected with kind of like it kind of like an installment sale that would have forever been outside of his taxable estate.

00;22;31;19 - 00;22;48;10
Brett Swarts
Now, it would have taken him selling the land to a third party buyer to. And with this trust. But the net result of the sale is $1 billion in there. It's forever outside of taxable state. And so then you have Beth Dutton, who's, you know, tax free when she, she's she's gonna be the beneficiary. And

00;22;48;10 - 00;22;50;24
Brett Swarts
what her brother, whoever her brother was and you know, whatever.

00;22;50;24 - 00;23;14;15
Brett Swarts
Right. Whoever he wanted to put that they can be the beneficiaries of that. So that's that's mainly focused on the death tax, right? That's the main thing. They're the payment of which over the time of while the person's still alive would be taxed as cap gains tax in interest as they receive it. So we have there's there's two main versions that are really attractive for folks.

00;23;14;15 - 00;23;20;08
Brett Swarts
If you look at it from that perspective, what you're trying to sell for. Yeah.

00;23;20;11 - 00;23;26;24
Craig Andrews
Well, well, this is really fascinating, but it's,

00;23;26;27 - 00;23;29;09
Craig Andrews
you know, the one thing it confirms, I heard years ago

00;23;29;09 - 00;23;34;03
Craig Andrews
somebody was selling company and they had,

00;23;34;06 - 00;23;44;04
Craig Andrews
you know, they have really good lawyers. And they said, you know, there's some areas you want to invest in because they can help you avoid a ton of tax and sounds like you help people do that.

00;23;44;07 - 00;23;46;11
Craig Andrews
How can folks reach you?

00;23;46;13 - 00;23;50;01
Brett Swarts
Yeah, we have a couple resources that I think could be really helpful.

00;23;50;04 - 00;24;11;27
Brett Swarts
You can go to capital Gains Tax solutions.com to learn more and about what we do, but also to check out the book that are on the Amazon called building a Capital Gains Tax Exit Plan. We actually, have some cool authors coauthored in this in the book, like Kevin Harrington from Shark Tank has a chapter, and we actually have Tony Robbins, CPA in the book, too, which is kind of cool.

00;24;11;29 - 00;24;15;26
Brett Swarts
But this is my, my, my story of of not knowing anything about this,

00;24;15;26 - 00;24;28;09
Brett Swarts
as a real estate, professional at Marcus and Millichap doing 1031 exchanges to the 2008 crash scene, folks, friends and family lose half of all their wealth to establishing our company to help people never face,

00;24;28;11 - 00;24;31;24
Brett Swarts
the capital gains tax trap. You know, when they exit businesses, Bitcoin or real estate.

00;24;31;24 - 00;24;37;14
Brett Swarts
So yeah. So capital gains tax, which is the place the book is building a capital gains tax exit plan.

00;24;37;16 - 00;24;41;19
Craig Andrews
Well excellent. Well Brett thanks for coming on Layers and legacies.

00;24;41;21 - 00;24;49;27
Brett Swarts
Appreciate it. Thanks for having me.

00;24;49;29 - 00;25;11;21
Craig Andrews
This is Craig Andrews. I want to thank you for listening to the Leaders and Legacies podcast. We're looking for leaders to share how they're making the impact beyond themselves. If that's you, please go to Ally's for me.com/guest and sign up there. If you got something out of this interview, we would love you to share this

00;25;11;21 - 00;25;13;16
Craig Andrews
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00;25;13;18 - 00;25;36;28
Craig Andrews
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00;25;37;00 - 00;25;45;05
Craig Andrews
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00;25;45;05 - 00;25;55;14
Craig Andrews
It means a lot to my team. If you want to know more, please go to Ally's for me.com. Or follow me on LinkedIn. Thanks for listening. We'll see you next time.