Salvatore M. Capizzi, CEPA, CBDA, is Dunham’s Chief Sales & Marketing Officer with 45 years of financial-services experience. His commentary has appeared on Bloomberg Radio and Yahoo Finance and in Kiplinger, Financial Advisor magazine, and ThinkAdvisor. A 2026 ThinkAdvisor Luminaries and Wealthies finalist, he writes about retirement planning and advanced tax, trust, and estate strategies.
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Adem Tumerkan • Oct 31, 2026
How Financial Advisors Can Explain Investments Simply and Build Trust
Pre-sale tax planning helps financial advisors identify ways clients may defer eligible gains, support charitable goals, or address estate taxes before selling a business or investment real estate. Options include installment sales, charitable remainder trusts, donor-advised funds, Opportunity Zone investments, qualifying 1031 exchanges, and advance trust planning. Each serves a different purpose. Asset type, transaction timing, income needs, and the client’s goals determine which approaches deserve a closer look with tax and legal professionals.
Key Takeaways:
Financial advisors can deliver massive value by guiding clients through advanced tax strategies before selling a business or real estate
Strategies like Intermediate Installment Sales, Charitable Remainder Trusts (CRTs), and Donor-Advised Funds may help clients create tax-efficient ways of managing capital gains tax or support charitable goals, depending on their circumstances.
Early trust planning, Qualified Opportunity Zone investments, Delaware Statutory Trusts (DST) and certain oil-and-gas investments offer different potential benefits, each with specific requirements and risks.
The Dunham Donor-Advised Fund offers flexible charitable giving options while allowing eligible advisors to continue providing investment management.
Advisors who understand and present these strategies position themselves as indispensable partners to clients and their tax professionals.
As financial advisors, when your clients plan to sell a business or real estate, you need to think of yourself as an expert archer, carefully selecting the right "arrows" from your quiver of tax strategies to ensure tax efficiency. With the right approach, you can help clients minimize taxes and potentially maximize financial returns from their sale.
The holiday season brings more social events, and it is an excellent opportunity to get in front of large AUM opportunities as you meet new prospects and catch up with existing clients. If one of them mentions selling a business or real estate and expresses concerns about taxes, introducing these tax-efficiency strategies can potentially win new business.
We have updated this article to reflect changes under the One Big Beautiful Bill Act (OBBBA), including charitable deduction rules effective in 2026 and Opportunity Zone provisions for qualifying investments beginning in 2027.
The article outlines seven tax strategies with an eighth bonus strategy at the end. Think of these as the arrows in your quiver that you can use when guiding clients through the sale of a business or real estate.
Each serves a different purpose. Some may eliminate capital gains, defer gains, others support charitable or estate planning goals, and some apply only to certain assets.
8 Tax-Planning Approaches for Business and Real Estate Sales
Strategy
Potential benefit
Best fit
Key timing
Through Dunham?
1. Intermediated installment sale
Defer capital gains for up to 20 years
Business owners or clients selling real estate
Structure before closing
Yes—Dunham Trust
2. Charitable remainder trust
Potential income stream, partial charitable deduction, and gain deferral
Clients with appreciated assets and client does not need to be charitably inclined
Fund before the sale becomes binding
Yes
3. Donor-advised fund
Tax deduction now, charitable grants over time
Charitable clients planning larger or bunched gifts
Before a binding sale if donating the asset
Yes
4. Qualified Opportunity Zone
Potential gain deferral and exclusion of qualifying appreciation
Clients with eligible gains and a long investment horizon
Generally within 180 days. Rules depend on investment date
No
5. DST via 1031 exchange
Defer eligible real estate gains
Investment or business property owners seeking passive ownership
Arrange before closing. Generally 45 days to identify, up to 180 to complete
No
Arrow No. 1: Intermediated Installment Sale
An intermediated installment sale is a sale in which your client transfers an asset to a trust or other intermediary in exchange for an installment note, and the intermediary then sells the asset to the buyer. It is based on the installment method under IRC Section 453.
This advanced strategy may let your client spread capital gains tax over time while the deferred tax amount stays invested. Using a trust as the intermediary helps reduce the risk of holding a note directly from the buyer.
Potential Benefits of the Intermediated Installment Sale:
Tax deferral: Eligible gain may be recognized as installment payments are received.
Potential investment growth: Assets supporting future payments may have an opportunity to grow, subject to investment performance, fees, and taxes.
Income planning: Scheduled payments may help replace income previously generated by the asset.
Payment flexibility: The installment terms may help coordinate income with the client’s broader financial plan.
There is no general 20-year deferral period provided by Section 453. Certain income, including depreciation recapture, may be taxable in the year of sale, and interest charges may apply to certain large installment obligations
Please note that Dunham Trust Company can assist in understanding the risks involved - including sequence risk, possibly paying the tax at a higher capital gains rate, and legislative and IRS uncertainty.
Arrow No. 2: Charitable Remainder Trust (CRT)
A charitable remainder trust is an irrevocable trust that pays income to your client or other beneficiaries for life or a term of up to 20 years, then leaves the remaining assets to charity.
A CRT can provide tax benefits while seeking to secure an income stream and a charitable gift.
Potential Benefits of a CRT
Defer Capital Gains: The trust can generally sell appreciated assets without immediate capital gains tax (gains are taxed to your client over time as they receive distributions).
Income Replacement: Clients can create an income stream to replace income lost from the asset’s sale.
Return on Deferred Taxes: The full sale proceeds can stay invested inside the trust instead of being reduced by tax at the point of sale.
Immediate Tax Deduction: Clients may receive a partial deduction in the year the trust is funded, based on the present value of the charity’s remainder.
Retain Most of the Economic Value: Depending on the payout and term, clients may receive a substantial share of the asset’s value as income. The remainder passing to charity must be at least 10% of the initial value.
Estate Tax Reduction: Assets in the trust are generally removed from the client’s taxable estate.
Charitable Contributions: Support a Donor-Advised Fund (DAF) or charity of choice.
Dunham offers illustrations and can help establish a CRT while advisors retain control of managing the assets.
Arrow No. 3: Donor-Advised Fund (DAF)
A donor-advised fund is a charitable account that lets clients contribute assets, take a tax deduction in the year of the gift, and recommend grants to charities over time.
A DAF allows the charitably inclined to maximize tax deductions by “bunching” multiple years of donations into one year.
For example, let us hypothetically assume your client typically contributes $50,000 annually to various charities and sells their asset for $5 million. They can fund a DAF with $500,000, equivalent to ten years of charitable giving. This may create a tax deduction in a high-income year, helping offset the tax on the sale.
Starting in 2026, itemizers can deduct charitable gifts only above 0.5% of adjusted gross income, and the deduction’s value is capped at 35% for the top tax bracket. Deductions are also limited to a percentage of the client’s income. Bunching can help clients clear the floor.
Dunham can help illustrate potential giving options. Eligible advisors may continue providing investment management for a Dunham Donor-Advised Fund account under the program’s terms. Remember, contributions are irrevocable, and the sponsoring charity retains legal control of the assets. Donors retain advisory privileges, including the ability to recommend grants.
Arrow No. 4: Qualified Opportunity Zone (QOZ)
A Qualified Opportunity Zone investment lets clients reinvest capital gains in a Qualified Opportunity Fund, generally within 180 days of the gain, to defer and potentially reduce tax while funding development in designated communities.
For Investments Made Before January 1, 2027 (Original Rules):
Deferral of Capital Gains: Deferred gain is recognized on December 31, 2026, so a new investment under these rules offers little deferral.
Reduction of Capital Gains: The 10% and 15% exclusions required five- and seven-year holding periods that can no longer be met by that date.
Tax-Free Growth: Holding the investment at least ten years can still exclude gains on the QOZ investment itself.
For Investments Made On or After January 1, 2027 (New OBBBA Rules):
Deferral: Gains are recognized on the fifth anniversary of the investment, not a fixed date (rolling deferral).
Gain Reduction: A 10% basis step-up applies at the five-year mark, or 30% for qualified rural opportunity funds. The extra 5% at seven years is eliminated.
Tax-Free Growth: Holding the investment at least ten years can exclude post-investment gains, with a 30-year cap.
If your client has a gain late in 2026, ask their tax professional whether the 180-day window allows them to invest under the new rules.
Arrow No. 5: Delaware Statutory Trusts (DSTs)
Certain Delaware Statutory Trusts hold investment real estate and offer fractional interests that may qualify as replacement property in a Section 1031 exchange.
DSTs can be particularly beneficial when diversifying your clients’ real estate investments while potentially deferring taxes. They allow clients to invest passively, making them a fit for those who want real estate exposure without the burden of direct property management.
Potential Benefits of DSTs:
Fractional ownership: Clients may gain exposure to larger real estate properties through a fractional interest.
Potential tax deferral: A qualifying Section 1031 exchange may defer recognition of eligible gain.
Diversification: Clients may be able to spread investments across properties or locations.
Potential distributions: Property operations may generate distributions, although income and returns are not guaranteed.
A 1031 exchange applies only to real property held for investment or business use, not business stock or a personal residence. Replacement property generally must be identified within 45 days, and the exchange must be completed within 180 days or the applicable tax-return due date, including extensions, whichever comes first.
Arrow No. 6: Investments in Oil and Gas Exploration
Certain direct oil and gas investments may allow clients to deduct qualifying intangible drilling and development costs, which can help offset income in a high-income year.
The amount and timing of any deduction depend on the actual expenditures, ownership structure, and the client’s tax circumstances. The ability to use losses against other income may also be limited by passive-activity, at-risk, and other tax rules. Alternative minimum tax considerations may apply.
These investments involve substantial risks, including unsuccessful drilling, commodity-price changes, operating expenses, illiquidity, and loss of principal. Clients and their tax professionals should evaluate the investment’s economics as carefully as its potential deductions.
Arrow No. 7: Pay the Tax
Paying the capital gains tax in the year of sale is the simplest option and requires no additional structures, though it is often the least tax-efficient.
Sometimes clients may prefer to pay the tax and move on with their lives. Paying the tax outright remains an option for those who do not want to use more complex strategies.
This is not my favorite strategy.
Bonus Arrow No. 8: Pre-Sale Trust Strategies
Pre-sale trust planning means moving an asset, or interests in it, into one or more trusts well before a sale to reduce estate, gift, or state income taxes on the proceeds.
Proactive planning well before selling could reap potentially significant benefits for clients who plan to sell their business or real estate in the coming years. We can help you explore different trust strategies that have the potential to offer substantial benefits:
Early implementation: Establish trusts well before the sale to maximize potential tax benefits.
Potential income tax reduction: In states with income and capital gains tax, there could be a reduction in the client’s annual tax bill.
Estate tax mitigation: Properly structured trusts can remove assets from the taxable estate, potentially reducing future estate taxes.
Gift value discounting: Some trust structures allow for discounting the value of the gifted asset, effectively stretching the lifetime gift tax exemption further.
Enhanced capital gains tax flexibility: Certain trust arrangements may offer opportunities to reduce or defer more capital gains when the asset is ultimately sold.
Strategic Planning: By addressing these issues early, you demonstrate forward-thinking financial planning to your clients, prospects, and their CPAs.
Closing Thoughts
Understanding and mastering these seven tax strategies (and the bonus eighth strategy) positions you as a key resource for clients seeking to sell business or real estate. You show your value as a financial advisor beyond investment management by offering comprehensive guidance and collaborating with CPAs and tax professionals.
For illustrations or help with any of the strategies available through Dunham, consult the Dunham Business Development Team at (858) 964 -0500 and always recommend that clients seek advice from qualified tax and legal professionals before implementing these strategies.
Frequently Asked Questions About Business and Real Estate Sale Tax Planning
What tax strategies should financial advisors review before a client sells a business or real estate? Advisors can review installment sales, charitable remainder trusts, donor-advised funds, Opportunity Zone investments, and advance trust planning with the client’s tax and legal team. Qualifying business or investment real estate may also be eligible for a 1031 exchange. The right starting point is what the client is selling, how the deal is structured, and the client’s income, cash, charitable, and estate planning needs.
What is the difference between a charitable remainder trust and a donor-advised fund? A charitable remainder trust can provide personal income, while a donor-advised fund does not. A CRT pays specified amounts to noncharitable beneficiaries for life or a permitted term, then passes the remainder to charity. A DAF holds an irrevocable charitable gift and lets donors recommend grants over time. Both involve charitable commitments and limits on tax deductions.
Can a client use a 1031 exchange when selling a business? A 1031 exchange may apply to qualifying real estate included in a business sale, but not to the business as a whole. It applies to eligible real property held for business or investment use. Replacement property generally must be identified within 45 days and received within 180 days or by the tax-return due date, including extensions, whichever comes first.
Can clients still reduce taxes after selling a business or investment property? Some options may remain after closing, but timing matters. A cash gift to charity may support a deduction, subject to limits, but won’t undo a gain already recognized. Eligible gains may qualify for investment in a Qualified Opportunity Fund within the applicable window. An installment sale or deferred 1031 exchange generally needs planning before the client receives the proceeds.
Disclosure
This communication is general in nature and provided for educational and informational purposes only. It should not be considered or relied upon as legal, tax or investment advice or an investment recommendation, or as a substitute for legal or tax counsel. Any investment products or services named herein are for illustrative purposes only and should not be considered an offer to buy or sell, or an investment recommendation for, any specific security, strategy or investment product or service. Always consult a qualified professional or your own independent financial professional for personalized advice or investment recommendations tailored to your specific goals, individual situation, and risk tolerance. All examples are hypothetical and are for illustrative purposes only.
Information contained in the materials included is believed to be from reliable sources, but no representations or guarantees are made as to the accuracy or completeness of information. This document is provided for information purposes only and should not be considered as investment advice.
Charitable Remainder Trust
This communication is general in nature and provided for educational and informational purposes only. It should not be considered or relied upon as legal, tax or investment advice or an investment recommendation, or as a substitute for legal or tax counsel. Any investment products or services named herein are for illustrative purposes only, and should not be considered an offer to buy or sell, or an investment recommendation for, any specific security, strategy or investment product or service. Always consult a qualified professional or your own independent financial professional for personalized advice or investment recommendations tailored to your specific goals, individual situation, and risk tolerance.
Federal and state laws and regulations are complex and subject to change, which can materially impact your results. Charitable deductions at the federal level are available only if you itemize deductions. Rules and regulations regarding tax deductions for charitable giving vary at the state level, and laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy or completeness of the information provided. Dunham Associates & Investment Counsel, Inc. (“Dunham”) cannot guarantee that such information is accurate, complete or timely; and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Always consult an attorney or tax professional regarding your specific legal or tax situation.
The trust is subject to the published fee schedule at the time the trust is established.
Income tax consequences for the donor can be complex, depending on the individual situation. All or some of the income from the trust may be taxed at ordinary income rates, but part may be taxed at lower capital gains tax rates, or may even be tax-free, for some years.
Donor Advised Fund
Investors should carefully consider a fund’s investment goals, risks, sales charges and expenses before investing. The prospectus contains this and other information. Please read the prospectus carefully before investing or sending money.
A donor advised fund is a separately identified account that is maintained and operated by a section 501(c)(3) organization, and is not a registered investment company.
Contributions to a Donor-Advised Fund are irrevocable contributions. Individuals considering a contribution to a Donor-Advised Fund should consult their legal and tax advisors regarding deductions, based on their personal considerations.
Administrative services fees and other fees may apply. There may be additional fees charged by the Financial Advisor that is separate from the administrative and impact investment fees.
The tax information provided is general and educational in nature, and should not be construed as legal or tax advice. Dunham does not provide legal or tax advice. Content provided relates to taxation at the federal level only. Charitable deductions at the federal level are available only if you itemize deductions. Rules and regulations regarding tax deductions for charitable giving vary at the state level, and laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy or completeness of the information provided. Always consult an attorney or tax professional regarding your specific legal or tax situation.
We encourage you to seek from qualified professionals regarding all, personal finance issues.
Trust strategies offered through Dunham Trust Company, a Nevada Trust Company. Dunham & Associates Investment Counsel, Inc., an affiliated entity of Dunham Trust Company, offers the Dunham Donor Advised Fund. For more information about the Dunham Donor Advised Fund, please visit https://www.dunham.com/FA/Pages/DAF .
Rules and regulations regarding tax deductions for charitable giving vary at the state level, and laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy or completeness of the information provided. Dunham Trust Company cannot guarantee that such information is accurate, complete or timely; and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although the trust itself is a tax-exempt entity, the trust income distributed to beneficiaries is taxable, according to terms dictated by the U.S. Internal Revenue Code and accompanying U.S. Treasury regulations.
Intermediated Installment Sale
This information presented may be used to promote a transaction nor idea and should not be construed as legal, and/ or tax advisor. This document is provided for informational purposes only.
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal
Dunham & Associates Investment Counsel, Inc. is a Registered Investment Adviser and Broker/Dealer. Member FINRA/SIPC. Advisory services and securities offered through Dunham & Associates Investment Counsel, Inc.
6. Oil and gas
Potential deductions for qualifying drilling costs
Clients with high risk tolerance who may benefit from deductions
Deduction timing depends on qualifying expenditures
No
7. Pay the tax
Simplicity and fewer planning restrictions
Clients who want a straightforward sale
Plan for applicable estimated-tax and filing deadlines
N/A
8. Pre-sale trusts
Potential estate, gift, or state income tax benefits
Clients with time for advance planning
Well before the sale, ideally before negotiations
Yes—Dunham Trust
Pre-Sale Tax Planning: 8 Strategies for Financial Advisors | Dunham
