1031 Exchange into a REIT via 721 Exchange
721 Exchange investors can benefit from the upfront tax deferral, stable income, capital preservation, and exit optionality of the DST, and then can gain tax-deferred access to an even more broadly diversified REIT structured to provide monthly income, capital preservation, additional growth potential, monthly or quarterly liquidity, and enhanced estate planning benefits.
Using 721 DST Properties For Your 1031 Exchange
Investors seeking to defer capital gains taxes while increasing diversification in real estate should consider utilizing a 721 exchange. The transaction allows investors to increase the liquidity and diversification of their real estate investments while deferring costly capital gains and depreciation recapture taxes that may result from the sale of a property.
Can I 1031 Exchange Out of a REIT?
REIT shares cannot be utilized in a 1031 exchange; the funds utilized in a 721 exchange transaction cannot be used in a future 1031 exchange. If shares in the REIT are sold, or if the REIT sells its properties and returns the capital gains back to investors, a taxable event would occur.
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Access Our Latest DST Listings For Your 1031 Exchange
Discover the potential benefits of investing in diversified portfolios of passive, institutional-quality real estate investments. Filter, sort, and analyze our available DST property investment listings.
Potential Benefits of a 721 Exchange into a REIT
Increased Return Potential from the REIT
Reinvest Dividends at a Discount to Potentially Compound Returns
Increased Diversification and Scale Intended to Reduce Risk
May Reduce Tax Filings Associated with Broader Diversification
Access to a Growing Portfolio that May Enhance Investor Value
Step-Up in Basis to Eliminate Past Capital Gains Tax for Heirs
Access to the REIT’s Redemption Program
Ease of Divisibility of Shares for Estate Planning Purposes
Explore 721 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. Some DSTs provide investors with tax-deferred access to a REIT upon exit via a 721 exchange. DST investments shown here are full-cycle, realized investment offerings and are not available for investment.