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Frequently Asked Questions
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What is a Blue Hat Trust?
A Blue Hat Trust is designed to allow the Trust to take ownership of your business, properties or assets so the Trust can sell it to the end buyer and issue you a promissory note.
Will an installment sale work in any state in the U.S?
This process is determined by Federal Tax Code so it works in any state.
How is an installment sale allowed?
Internal Revenue code 453 which has been a part of the tax code for almost 100 years.
Can I put more than one business or property in the same Trust?
You can put as many assets as you like in the Trust and at different times.
Will I be responsible for paying taxes of the trust?
The Trust sets up its own EIN# with the IRS and files its own tax return. You pay taxes on the income you receive from the Trust from the promissory note payments.
What happens to existing loans for my business or assets?
Loans get paid off at closing from the proceeds the buyer brings to the table.
Where does the money go after the sale?
You choose a bank and set up a bank account for the Trust. The funds are deposited in the account after the sale.
What types of investments are allowed for the trust?
Stocks, bonds, mutual funds, businesses, real estate, syndications to name a few. The Trust can also do lending and joint venture investments.
How do I get Paid?
The Trust issues a promissory note to the seller (you) on terms that you decide with the Trustee.
How does money transfer?
Typically two people have to authorize a transfer or investment of the money with you being one of the two. Multiple touch points and checks and balances are put into place.
Are there time constraints like a 1031?
There are no limits or time frames to invest the money.
If I sell Real estate, does the depreciation schedule from prior assets transfer like a 1031?
If the Trust invests in real estate, you start with a new depreciation schedule.
Do you have to replace debt like a 1031 requires?
You do not have to replace debt.
Can my attorney / CPA / Significant other review the information?
Yes.
As a reminder, our documents, guides, agreements and templates are all copyrighted.
I'm interested in learning more. What is the next step?
Contact me by sending an email to Todd@BlueHatWealth.com.
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