The Realized Team’s Picks
Using a Delaware Statutory Trust (DST) for a 1031 in California
California is home to one of the most active and complex real estate markets in the country. The state is wealthy, with diverse markets that range from high-value properties to areas with promising growth potential. As you set your eyes on this location, however, it’s important to consider California’s unique characteristics and potential challenges. From high acquisition costs to the complex tax landscape, there are many variables investors must take into account.
Can You Do a 1031 Exchange on Commercial Property?
A 1031 Exchange is a tax-advantaged investment strategy that may allow you to defer capital gains taxes and potentially preserve your income. The IRS has set many rules and stipulations for these kinds of transactions, which are put in place to avoid abuse and maintain the integrity of the exchange.
How To Sell a Commercial Property Using a 1031 DST
A 1031 exchange allows investors to defer capital gains taxes by reinvesting sale proceeds into qualifying like-kind property. When paired with a Delaware Statutory Trust (DST), you can also enjoy passive income and diversification.
What Is Section 121 Home Sale Exclusion & How Does It Work?
When it comes to managing real estate wealth, tax efficiency matters. Most investment property owners are familiar with the 1031 Exchange as a way to defer taxes on commercial or rental properties. But if you’ve ever converted a rental into a primary residence — or vice versa — it’s worth understanding another key tax provision: Section 121 of the Internal Revenue Code, often called the Home Sale Exclusion.
Can a Real Estate Broker Sell a Delaware Statutory Trust (DST)?
A Delaware Statutory Trust (DST) is an investment vehicle that may be used as replacement property in a 1031 exchange to defer capital gains taxes and potentially enjoy passive income. DSTs are typically structured as private placement securities and are available only to accredited investors.
Why Use a Delaware Statutory Trust (DST)?
Among the many alternative investment options available today, Delaware Statutory Trusts or DSTs have gained popularity because of benefits like minimal investor involvement and truly passive income. When combined with 1031 Exchanges, DSTs also provide tax-deferral benefits that help investors preserve their capital. Even so, there are still those who are unsure regarding DSTs and their benefits, especially when traditional 1031 Exchanges are also a viable option.
Who Sets Up and Sells Delaware Statutory Trusts (DSTs)?
Among various tax deferral strategies available to investors today, Delaware Statutory Trusts (DSTs) remain a popular choice. When used with 1031 exchanges, DSTs allow you to defer capital gains taxes and enjoy not having to deal with day-to-day operations. Those who intend to employ this strategy should be knowledgeable about the DST to determine if it’s a strategy that aligns with their goals.
What Is the Holding Period for a Delaware Statutory Trust (DST)?
When you join a Delaware Statutory Trust (DST), there are certain features that you should take into consideration, such as the DST holding period, which is the length of time you’re expected to keep your investment in the trust before the underlying property is sold.
What Invalidates a 1031 Exchange?
A 1031 Exchange is one of the most powerful strategies available to investment property owners because it allows for the deferral of capital gains taxes when selling and reinvesting in like-kind property. However, the exchange must follow strict IRS rules to keep those tax benefits intact.
How To Find a Buyer for Commercial Real Estate Property
Selling commercial real estate is often more complex than selling a residential property. From navigating investment expectations to meeting sophisticated buyer criteria, it takes more than simply putting a listing on the market. Successfully finding qualified buyers for commercial real estate involves strategic preparation, proactive outreach, financial transparency, and sometimes creative deal structuring — especially when tax efficiency, like a 1031 Exchange, is part of the equation.
