Business Innovators Radio - Brett Swarts, Founder and CEO of Capital Gains Tax Solutions & Author of “Building a Capital Gains Tax Exit Plan”

Episode Date: July 13, 2025

Brett Swarts is a best-selling author of “Building a Capital Gains Tax Exit Plan”. He is host of the Build it to Billions & Capital Gains Tax Solutions Podcasts. His insights have been featured at the Best Ever Real Estate Conference, DLP Capital Conference, American Entrepreneur with Kevin Harrington from Shark Tank, and also seen on Fox Business Network. As a real estate broker, his expertise is one of the few in the world who has closed Deferred Sales Trust, Delaware Statutory Trust, and 1031 Exchanges. He is the Founder of Capital Gains Tax Solutions where he teaches purpose-driven entrepreneurs and investors to build their capital gains tax exit plan to multiply their freedom, wealth, and impact. He has closed over ½ Billion in DST and Real Estate Transactions and he was the first to help Bitcoin owners exit millions of gains and defer their capital gains tax using a DST.Learn more: http://www.capitalgainstaxsolutions.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/brett-swarts-founder-and-ceo-of-capital-gains-tax-solutions-author-of-building-a-capital-gains-tax-exit-plan

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of Influential Entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have with us Brett Schwartz, who's the founder and CEO of Capital Gains Tax Solutions and the author of Building a Capital Gains Tax. exit plan. Brett, welcome to the program. Mike, grateful to be here. Thanks for me. Hey, I want to talk to you first and foremost about your work with business owners and entrepreneurs, but get us started with a little bit of your story and background and how did you get into the industry. Yeah, started at Wauvee Securities at internship and college with my high

school basketball coach who was a long-term financial advisor. So I fell in love with, you know, the ability to help people be great stewards with their wealth and strategy and investing and playing with that. And growing up, my parents were divorced. We had a lot of money before they were divorced. And then my dad didn't pay child support. So I knew at a young age, I didn't want to have wealth coming between myself and my family and those that I could help as well. And I kind of grew up mostly at a real estate wealth family in California. So we learned about a lot of real estate investing in management and development. Fast forward from Wachovia, I went to a place called Marcus and Milichap. And I like to say, I learned about how to be a real estate investment advisor. I ended up

getting my series 22 and 63 to be able to do some Delaware statutory trust, but we mainly focused on 1031 exchanges. And that was all great and fun and exciting until it wasn't in the 2008 crash when we saw friends, family, clients who's half were all their wealth. And I couldn't help but say, you know what? It seems like these worlds are separate. There's real estate investment world with 1031's versus the securities world, diversification, liquidity and more, you know, made more traditional investing. And I just seemed like there should be a better, a better connection between the two and the challenge we found was capital gains tax kept it separated mostly because you cannot 1031 exchange into, let's say, diversified portfolio of liquid investments

until we found a different way to be able to do that. And so now we bridge the gap between those that want to sell, want to be done with the toilets, the trash, the termites, want to be in, you know, securities and investments, or just a diversified portfolio of passive real estate investments and not have to suffer the consequences of massive capital gains tax. And so this is what we help. We help by advisors across the country, CPAs, financial advisors, business brokers, MDA advisors, real estate agents, basically build capital gains tax exit plans that gives their clients flexibility to make great decisions with their wealth rather than not selling or not, you know, not, you know,

or paying a bunch of a huge capital gains tax. Yeah, it sounds like it either keeps you in handcuffs or pulls out the, the lining in your back pocket and just empties money. that shouldn't be. Yeah, it's a good way to think about it. Yep. So you mentioned like some of those things that made me think what would be a trigger for a business owner to go, ooh, I might need to find out more about that because they just think they're just happy, go lucky doing things the way they've always done. It's fine. It's good enough. What would be a couple things they could keep in mind to notice to go, ooh, if this happens, then I might need to look closer. Yeah. The first thing we says when they're trading what's priceless for what's profitable.

You know, a lot of our clients are facing massive, massive gains and success in their real estate, their businesses, even publicly traded stock, Bitcoin. And they're like, you know, what, for what, right? For what? What matters most to them? And I think just getting clarity on that mission, vision values for your family and your wealth and what that looks like today, not waiting until like a death and a stepped-up basis or not waiting for something else to be massively changing in your health to make this

decision. You know, sometimes the health concerns can make the decision for you. We like to say, you know, what matters most to you right now? What are the things that you believe in that you can make a difference in right now? What if you could free up more of your time in your energy to make an impact for something that you feel called to in this season of your life? And I like to give this as a story. We had a client named Warren and Catherine and they were selling a multifamily property in Sacramento,

Mendo California. They've done the 1031 exchange and built up a couple million dollars of wealth. And they have it about $120,000 nano, NOI. But they have about a million dollar tax if they sell. And it's about 15 apartment units. And I say, Warren and Catherine, why don't you sell their apartment? Why don't we increase your cash on cash, pay off any debt that you have, and basically free up your time that is being spent dealing with the property.

And once they look at that, and they do the ROI comparison. And it's really not just the return on investment, but it's the return on impact. And they do the ROT, their return on their time. And most of all, they had two twin daughters a little bit later in life. And they're 10 years older. They're looking at like about an eight-year run before their children are out of the house and in college and such. So it was a very easy, clear decision once you break those things down. And you step back from just the cash on cash return from just the appreciation, right?

And you look at what if there's a plan that you can do both? And we call this the power of and. One of my mentors just talks about this. A lot of times we think it's one, it's, or, you know, it's this or this. You know, it's high appreciation and some cash flow or it's paying massive capital gains tax or it's doing this 1031 exchange that I want to do. Well, the power of Anne says, what if you were to sell, defer the capital gains tax and get diversification and get liquidity and get more of your time back?

And we call these two and three for ones. It changes everything for families. And it's been transformational for their family. They spend more time with their daughters and more travel. They have more cash flow. They have more asset protection. They have less headaches. And that's the beauty of what we like to build with our clients.

You know, that's huge. I love the and it reminds me of when you're in conversation with someone and go, yeah, that's nice. But in the minute you say, but it's like drawing a line of the sand and going, you're so wrong. let me show you where I'm right, but when it's the power of A and you're saying, hey, that's a great point. And another thing, it kind of smooths things over, but it sounds to me like you're using it as a wonderful way to open up opportunities because you can have this and you can have that, but you sometimes people just don't know what they don't know.

It's true. And they have advisors that have only been trained in certain products and in certain strategies. And they're not combining cash flow, tax flow and debt flow. They're just focusing on cash. cash flow. Cash flow is king, and that's the main focus. Well, yeah, but it could also be detrimental if you don't have a good tax flow plan and a debt flow plan. And that's what we've seen with those who've been overappreciated in real estate these last few years. Now they're getting crushed

because interest rates have doubled and rents have kind of flattened out. And so there's time is the one thing you can never get back. And it's a single most important denominator to investing. And so you just have to be able to have that on your side. And that's the beauty. We work with purpose-driven entrepreneurs and investors that had built massive wealth and Bitcoin businesses or real estate, and they're looking for an ability to diversify,

ability to get time on their side, and the ability to make great decisions on any asset class at any time. And once you get that on your side, it unlocks what we call freedom and freedom to make great decisions and also the ability to make more impact today. Yeah. You know, I love how you talk about cash flow and tax flow. And I think if an entrepreneur hears the word cash flow, they go, oh, yeah, yeah, that's the money flowing through my business. I get that. But how do you define and describe tax flow? Yeah, so tax flow is basically the positive ability to use depreciation to offset cash flow. Okay. So the reason the government gives such great incentives to own real estate, such as real estate, some other stuff too,

It's because they can't force the American entrepreneur or developer to build or manage real estate. Right. And so they need housing for the American public. Right. And so they give tax incentives to encourage those that are willing to build and get massive, massive ability to depreciate and incentivize them to do it. And so a tax law is simply basically, how much depreciation do you have right now? Are you doing a bonus depreciation with a new big, big beautiful bill that just is going to go? to 100%. Are you looking at ways to reset your depreciation? Are you in assets like Bitcoin or

publicly traded stock that have no depreciation ability, right? Are you in a real estate property that you've owned for 27 and a half years? It's multifamily and it's fully depreciated. We've got to focus on increasing your tax flow. Your cash flow, most of our clients are worth you know, five to $100 million. You know, they've achieved the cash flow game and they're just drowning with excess cash flow that they're getting crushed with tax. They don't have a, a efficient income tax deferral strategy. They don't have enough depreciation to offset their cash flow. And so it's the opposite of stewardship. It's kind of like burning money out every single year out the window or just throwing out the window to the tax man. And so this is this is the part where

we need to combine and change the mindset from from not just cash flow, but to tax flow. And then also debt flow, which we can talk about too. You know, it sounds to me like, it's similar to climbing the mountain and they've already climbed to the top of the mountain and, you know, strivers and accumulation and all that. Now they're in the realm of preserve and decumulation and plugging up the holes in that bucket because they don't need the money per se, they just need to preserve the money from going out to where it shouldn't go. And I definitely want to hear about debt flow.

But one question that I've got is when you start talking about these topics, are there aspects that people would say to you, that just sounds like, too good to be true. So before I answer that, I want to go back to the power of Ann and encourage everyone who's listening to this to define what's called their truly passive income number where you're right, they don't necessarily need to make another dollar or another investment, and they are in a sense preserving a certain part of their bucket of wealth. But I would say the power of Anne says, don't just sit and store up your wealth in a barn and let it just sit there and pay for it. Let's still be great stewards. And let's see we can multiply and compact.

in a prudent way, right, a smart strategic way, so that we can give now to to help MVPs, the most vulnerable people. You know, the MVP, I grew up playing college basketball. And MVP has always been the best on the team. And I learned from Tim Tebow, you know, the true MVP is the most vulnerable people that we can help right now. And so the power band says,

how can I be a steward? We started a podcast called Build It to Bill It to Billion so you can give more all of it away to help MVP's. And it's not that you just sit, and store up and not saying that you said that per se, but I think sometimes this is where the natural inclination is, well, how much can I just get to my retirement number and how much can I just, you know,

feel safe and secure and I can just stick it in, you know, 5% fixed or 4% income stuff and I'm good to go, right? Well, okay, well, what if there's still stuff that are, you know, is 10 and 12, maybe 15 or 16% that's real estate debt right now because interest rates are high, that you could be in a very, you know, a strategic position to compound the ability to have extra, cash flow to give right now. And if you could show your kids how to do that, right? And you can do that

in a way in which you're passing a legacy in somebody of giving right now rather than just, you know, kind of getting frozen. And so I would say that's the power man. To answer your second question, you know, the two good to be true one's a great one. I always love going to the away basketball games. I like it better than the home games because everyone at the away games is against you, right? And I remember taking the ball out and people would be grabbing my basketball shorts, yelling and screaming and like all these, you know, all these crazy stuff. And the best was always beating those teams, especially if they took you for granted. We won every single section championship in high school.

We won our, I'm sorry, our league championship. We won one section championship. And we were fourth kind of semifinals, the state finals, finalists. And I went on college and played. And I'll never forget, you know, over. these big, you know, challenging teams that folks thought we didn't have a chance. I think that's part of what drives me is being able to deliver something that helps people overcome a false belief. And we do this through telling a better story.

You know, one of our better stories is we work with a Strategic Alliance who was one of the former VPs at PIMCO. And he basically built PIMCO with Bill Gross from 80 billion to 1.2 trillion 20 years ago. And he managed some of the biggest wealth in the entire world. And so he looks at our strategy. This is about six, seven years ago. And like most folks, it sounds too good to be true. And so instead of convincing people with logic, and I say, well, there's been thousands of transactions, you know, billions and billions of assets sold using our strategy,

about two and a half, no change audits, never had a change. That's all logic. Rather, I could share that, but we really make sure we lead with story. Well, David, this gentleman, after two years of due diligence with his legal team, came to the conclusion that, you know, this is one of the best things that they had never scene and they're a part of our inner circle to help actually work with the advisors that we work with to manage capital. And once you say, oh, wow, if it's good enough for someone like that, who's one of the

best in the world of what he does, who did two years of due diligence, is it good enough for me and my clients? And often that's nine out of ten, they just join us once they understand that, who's on our team. So I think it's the power of who and the people who have already done this with us. Of course, our clients and everyone else, that's really sophisticated and smart. but if you get stuck in the old advisors or the old CPAs who are just, you know, basically managing their own risk rather than your tax liability,

then sometimes people do succumb to that, you know, either that fear or that uncertainty. And we just do our best to help the next best person versus paying all the tax. Yeah. Yeah, I love it. And the point that as you get bigger and more integrated in with the industry, you have more success stories and more strategic alliances, then the too good to be true kind of dissipates because it's like, okay, I want to be part of that case study, that success story. So let's wrap up with the quick overview definition or example of the debt flow that you mentioned. Yeah, so debt flow is basically understanding that, you know, interest rates aren't always going to be

high or low or in the middle. They're going to change and adjust. I'll never forget one of my great clients out in Sacramento, multifamily property owner, he's worth about $5 million, $7 million. And he's super smart. And he's like, all these interest rates are going to be this low forever. This is about five years ago. I'm like, really?

He's like, oh, yeah, here's the things. And I'm like, wow, that's too smart for me, right? And I'm just thinking through that. Obviously, it changed, right? And the interest rates jumped drastically. And in the marketplace has shifted and people are getting, you know, sunk by this, by this debt that's pouring into these ships. And these ships are like these multifamily, mobile home park, industrial properties. anything where you used to be three and a half, four percent is now six and a half, seven,

maybe eight percent, nine percent, and everything else is going pretty good. Occupancy is pretty good. Rents and maybe have flattened out some, but, and the operations are doing well, maybe had some property tax increased and made some property insurance increased. That definitely went up. But ultimately, this debt is what's sinking the ship and it's just pouring water into it. And so I think we take for granted, and people took for granted, especially in the commercial real estate world just how important a mindset of debt flow is and underwriting your debt and getting long-term fixed debt and not getting the adjustable debt, getting non-recourse debt. And if you're not and you take it for granted, it's one of the key pillars.

Now, the opposite is true. I want you to go into debt when you can buy at a discount. So there's smart debt and there's dumb debt. And I think smart debt buys when the basis and the overall intrinsic, value of the real estate or the business makes sense. That's when we want to pour on the gasoline and actually leverage and use the debt piece of it. And then the opposite is true when things get to the point where you feel, which I felt a couple of years ago, that everything was highly appreciated and we're in the seller's market, we got out of real estate. We got out of equity

positions. And we went into actually debt. We went into real estate debt. We didn't fight it. And we started around 6% and we got to 10. And now we're at 16 and 18% for some of these these loans that we're working with these groups on. And then guess what? We're looking for real estate deals that are discounted now and buying some positions that are based upon the basis, knowing that although we have to borrow a little bit more, and we do think eventually it'll calm down in a couple of years.

So it's a flux, right? So it's understanding debt, understanding adjustable debt, understanding the power of debt when it's a good time to go into it. And also the risk and the danger of debt when it's a good time to get out of it. and focusing on a laser and not taking it for granted. You know, I think there's about, you know, a three-day seminar just into topics you brought up,

and then that still would be just scratching the surface. So I'm confident that you've just got so many resources available for people to learn more. And if someone is interested in that, what's the best way that they can learn more and reach out and connect with you? Yeah, Capital Gainstax solutions.com, especially if you have a massive big exit, at least a million dollar net proceeds, a million dollar gains. So bigger exit, you know, bigger gain, and you're facing 20, 30, 40, 50 percent in capital gains tax depreciation recapture and or you may have a massive estate tax challenge that we can also solve for, not without any life insurance, gifting or charity required. So these are for larger taxable estates. We work on a conditional basis, and we basically compare and contrast 1031 exchanges and other strategies.

Our particular niche focus is what's called a deferred sales trust. It's an installment sale with the trust that most people don't know how to do or execute. Sometimes they're doing a mixture of both. And so we just basically assess, give you some options, and then see if one of them is a good fit. And again, for the financial advisor listening out there, if you have clients that are selling a primary home, Bitcoin real estate business, even stock, and they want to diversify that wealth, defer the tax. I'll finish with this story. I'll finish with the financial advisor out of Sacramento. In fact, you can watch this whole story, Joe Walters.

his client was selling a $40 million billboard company. This is California, massive tax, and looking at huge, huge tax, 37 to 40%. And there's those digital billboards, if you've ever seen them. Well, he was able to sell, use our services, we're a trustee, and we were to defer all the tax, and then that advisor gets to manage the capital. So it's a team approach here. And so he increased his AUM drastically. The client obviously deferred, you know, and got to have an extra in the trust owed to him

30 to 40% of the proceeds. He's diversified. And the cool thing is we got out of the real estate business and he put it into Navidia stock a couple years ago, a portion of it, of course, diversified. But a good significant amount. And that Navidia stock has done very well for the trust. And so that's the beauty. And then we can also sell that at a good profit.

And he can go back into real estate tax deferred. And so that's the idea. How do you sell high, buy low, diversify when it makes sense. Anyway, so Capital Gainstax Solutions.com is the place to go. Awesome. Brett, thank you so much for coming on today. It's been a real pleasure chatting with you. Likewise. Thanks, Mike. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes,

visit www. www.influentialentrepreneursradio.com.