Delaware Statutory Trust (DST)/ 1031 Exchange

What is a 1031 Like Kind Exchange?

Like-kind refers to the type of property being exchanged. You can exchange any investment real estate for any other type of investment real estate - for example, vacant land can be exchanged for rental property. In most cases your personal residence is not a like-kind investment property.

 

Like-Kind Property

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MultiFamily

Retail Center

Retail Center

Industrial

Industrial

Commercial

Commercial

Land

Land

Student Housing

Student Housing

Rental Income

Rental Income

Healthcare

Healthcare

Oil/Gas

Oil/Gas

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What is a Delaware Statutory Trust (DST) and how does it work?

A Delaware Statutory Trust (DST) is a separate legal entity formed as a trust under Delaware law. If properly structured, the DST will be classified as a grantor trust for federal income tax purposes and, as a result, the purchaser of a beneficial interest in the trust will acquire an undivided interest in the asset(s) held by the DST. DSTs may qualify for 1031 exchanges. 

 

What are some the benefits of a DST?

A DST may offer potential benefits that might be attractive to someone selling appreciated real estate. In addition to allowing the individual to defer taxes, a DST might offer the following:

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Diversification into More than One Property and in More than One Market

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Competitive Income

Predictability and Flexibility when Closing

Access to Institutional Quality Real Estate

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Non-Recourse, Institutional Financing

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No Management Responsibilities, Professionally Managed

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Flexible Investment Amounts

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Investment Portfolio Diversification

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Get Answers to your DST/1031 Exchange* Questions

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Who Is An Accredited Investor?

Regulation D Investments are Generally Only Available to Accredited Investors

For most Investors this means:

Net Worth Exceeds $1,000,000

(Not Including Primary Residence)

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Individual Income Exceeds:

$200K for EACH of Last 2 Years

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Joint Spouse Income Exceeds:

$300K for EACH of Last 2 Years

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A typical 1031 exchange has three basic steps.

Exchanger sells property, known as the relinquished property, and proceeds are escrowed with a Qualified Intermediary (QI).

Exchanger sells property, known as the relinquished property, and proceeds are escrowed with a Qualified Intermediary (QI).

Qualified Intermediary, Through a written agreement with the investor, transfers funds for purchase of replacement property

Qualified Intermediary, Through a written agreement with the investor, transfers funds for purchase of replacement property

Exchanger receives new property (or DST interest)

Exchanger receives new property (or DST interest)

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To receive our “Guide to DST’s, what you need to know,” 
complete the information  and click the button below.

Our Guide Includes:

  • What is a 1031 Like Kind Exchange?

  • What are the benefits?

  • What are the options – active ownership vs passive ownership via a DST?

  • What is a DST?

  • Tax deferment

  • How does it work?

  • Who is eligible?

Our team of skilled professionals can help you better understand DSTs and 1031 exchanges. Let us help you defer your tax liability and preserve your profits when you plan to sell an income property and reinvest the proceeds.

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Delaware Statutory Trust News

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* Charles River Financial Group does not provide tax, legal or accounting advice, nor can we make any representations or warranties regarding the tax consequences of your exchange transaction. We strongly encourage you to seek appropriate professional advice regarding your specific facts and circumstances. This is for informational purposes only and does not constitute an offer to purchase or sell scrutinized real estate investments. Such offers are only made through the Sponsors Private Placement Memorandum (PPM) which is solely available to accredited investors and accredited entities. There are risks associated with investing in real estate and Delaware Statutory Trust (DST) properties including, but not limited to, loss of entire investment principal, declining market values, tenant vacancies and illiquidity. Investors should read the PPM carefully before investing paying special attention to the risk section.