Utilizing DSTs in 1031 Exchanges
Real estate investors who need stable, passive income and relief from the burdens of management can use a Delaware Statutory Trust (DST) to complete their 1031 exchange.
What is a Delaware Statutory Trust (DST)?
A Delaware Statutory Trust (DST) holds title to real estate and allows multiple investors to own a fractional share. DSTs are commonly used in 1031 exchanges to defer capital gains taxes while earning passive income from professionally managed properties.
Do DST properties qualify for 1031 exchanges?
According to IRS Revenue Ruling 2004-86, a properly structured DST investment can qualify for 1031 exchange tax deferral. With a DST, investors own shares of a diversified portfolio of income-producing real estate that is institutionally managed on their behalf. The DST holds title to real estate and is structured to shield its owners from personal liability, while entitling them to a pro rata share of the rental income, tax deductions, long-term growth potential, and estate planning benefits of the underlying real estate.
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Potential Features of Delaware Statutory Trusts
Can Be Diversified Across Multiple Properties or Portfolios
Limited Liability and Non-Recourse Financing (If Debt is Needed)
Structured to Avoid the Burdens of Management
Investment Amount Customized to Fit Exactly What is Needed
Can be Diversified Across the Nation and by Asset Class
Investors Can Close Escrow in as Few as 1-3 days
Structured to Provide Stable Monthly Income
Multiple Exit Options Including Access to a REIT
Explore DST Investments For 1031 Exchanges
A Delaware Statutory Trust (DST) holds title to real estate, allowing multiple investors to own a fractional share. DSTs are commonly used in 1031 exchanges to defer capital gains taxes while earning passive income from professionally managed properties. DST investments shown here are full-cycle, realized investment offerings and are not available for investment.