Why eligibility matters here
DST interests and most private 1031 replacement offerings are private securities sold under Regulation D of the Securities Act. By law they are generally available only to accredited investors — individuals and entities the SEC presumes can evaluate and bear the risks of private, illiquid investments. If you are not accredited, you generally cannot invest in these offerings.
The individual pathways (SEC Rule 501)
An individual qualifies by meeting any one of these tests:
- Income. Individual income over $200,000 in each of the two most recent years (or $300,000 jointly with a spouse or spousal equivalent), with a reasonable expectation of the same in the current year.
- Net worth. Net worth over $1 million, alone or with a spouse, excluding the value of your primary residence.
- Professional credentials. Holding a Series 7, Series 65, or Series 82 license in good standing — a pathway added in 2020 — regardless of income or net worth. Certain knowledgeable employees of a private fund may also qualify with respect to that fund.
As of 2026 these thresholds are unchanged. Regulators have discussed indexing them to inflation, but no such change has been adopted. Confirm the current definition before you rely on it.
Entities
Entities can qualify too — for example, trusts and certain organizations with more than $5 million in assets, entities owned entirely by accredited investors, and various banks, funds, and registered advisers. The specifics depend on the entity type.
506(b) versus 506(c), and verification
Most offerings rely on one of two Regulation D exemptions, and they treat your status differently:
- Rule 506(b). No general advertising. The issuer may rely on your self-certification of accredited status and may include a limited number of sophisticated non-accredited investors.
- Rule 506(c). Public solicitation is permitted, but every investor must be accredited and the issuer must take reasonable steps to verify it — typically by reviewing tax forms, brokerage or bank statements, or a written confirmation from your CPA, attorney, or registered representative.
This is why a DST sponsor or broker-dealer will ask for documentation: under 506(c) verification is legally required, not optional.
- DSTs and most private 1031 offerings are sold only to accredited investors under Regulation D.
- Individuals qualify by income ($200K single / $300K joint, two years), net worth ($1M excluding primary residence), or a Series 7/65/82 license.
- Entities can qualify, commonly with more than $5 million in assets or if wholly owned by accredited investors.
- Under Rule 506(c), issuers must take reasonable steps to verify accreditation, so expect to provide documentation.
- As of 2026 the thresholds are unchanged, though inflation indexing has been discussed.