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How am I taxed on the payments received from the Deferred Sales Trust?

April 26, 2017Deferred PAYMENTS received sales TAXED Trust

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How am I taxed on the payments received from the Deferred Sales Trust?

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Part of each payment is returned to you tax-free as a return of your basis. The remainder of each payment is taxed partially as capital gains and partially as ordinary income. Some depreciation recapture may have to be accounted for as well, depending on the type of asset sold.