A Delaware Statutory Trust Exchange (DST) leverages Section 1031 of the Internal Revenue Service Code, allowing real estate investors to exchange current holdings for new ones, while deferring the capital gains taxes that ordinarily would be due.
DST investments are structured to defer capital gains taxes in accordance with 1031 exchange requirements. As DST owner, you own an undivided interest in a property along with other co-owners. Thus, a DST owner may own a share of the entire apartment complex, corporate office building, shopping center or industrial warehouse rather than a specific tenant space.
Why choose a DST Investment?
DST 1031 tax deferred exchanges provide more flexibility than a traditional 1031 exchange to the real estate owner through: flexible investment size, timing, additional diversification, and institutional real estate, as follows:
- The ability to have more investment options available during the 45-day identification period.
- Owners receive current monthly cash flow, in addition to capital appreciation potential, depending on the individual investment property chosen.
- The DST arrangement is structured so the buyer can benefit from the IRS Revenue Procedure which stipulates the rules that DSTs must follow to allow 1031 tax-deferred treatment (Rev-Proc 2004-86).
- Eliminates the headaches of direct property management — you are buying professionally-managed investment property.
- Allows the investor to acquire investment-grade property of significantly higher quality than the value of their sold property.
- The investments are flexibly-sized in percentage ownership units, so we can easily match the amount you require for your exchange.
- Allows for all tax advantages and appreciation of real estate and is also available for cash investors
- Pre-arranged, assumable, non-recourse, fixed-rate financing and easy approval. Zero to 80% leverage available.
- The complex timing requirements of the 1031 exchange are designed into the DST, so it’s not a problem to satisfy the 45-day identification period or the 180-day exchange and closing period.
This is a very brief summary of the concepts and principles involved in DST/1031 Real Estate Exchanges; there is much more that we could cover in a personal consultation. I’d welcome the opportunity to work with you on a specific plan to avoid or reduce capital gains taxes on your current investments.
This information is not intended to be a substitute for specific tax, legal or investment planning advice. We suggest you discuss your specific tax issues with a qualified tax advisor.
This is not an offer to purchase or sell securities. This is for informational purposes and is not an offer to sell or a solicitation of an offer to buy any securities and may not be relied upon in connection with the purchase or sale of any security. Data quoted represents past performance, and is no guarantee of future results.