Thorough due diligence is essential when evaluating a DST investment manager. From understanding background and track record, to reviewing investment thesis, market analysis, and financial model, each helps investors assess whether the investment manager’s strategy aligns with individual investment goals and risk tolerance.

Investment property owners are continually seeking tax-efficient strategies that preserve long-term wealth while also offering potentially attractive returns. One strategy that has been gaining popularity among private real estate investors is the 721 exchange.

A 721 exchange is a powerful tax-deferral strategy for those looking for portfolio diversification combined with liquidity options and increased tax-management capabilities. It is imperative to work with tax and financial professionals to ensure this complex strategy aligns with long-term financial goals. While this strategy provides many advantages, every investor’s situation is unique, and careful planning is essential for maximizing the benefits of a 721 exchange.

This article explores how a 1031 exchange via a Delaware statutory trust (DST) can meet the needs of several investor profiles. Keep in mind that each investor’s tax situation is different and they should consult their tax advisor.

For accredited investors, mastering the nuances of tax-advantaged real estate investment strategies is key to optimizing wealth-building opportunities. Among the most effective tools are the 1031 and 721 exchanges, each offering significant tax-deferral benefits that can potentially enhance long-term financial growth.

By investing in a Delaware statutory trust, or DST, heirs may receive any distributions paid from the investments. Upon the sale of the property owned by the DST, each heir can choose what to do with their inherited portion. It is possible that one heir continues to exchange the investment, while another can sell and receive cash proceeds.

1031 and 721 exchanges are powerful tax-advantaged tools that may allow for the deferral of capital gains taxes on the sale of real property used for business or investment purposes.