--- title: Can a Delaware Statutory Trust (DST) Be Gifted to Someone Else? description: Learn more about can a Delaware Statutory Trust (DST) be gifted to someone else? image: https://www.realized1031.com/hubfs/iStock-2026177119-modified-a1e16e05-e2b7-4739-8dd9-7e4c26c27297.jpg --- [![Realized 1031 Exchange Marketplace](https://www.realized1031.com/hs-fs/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black.png?width=240&height=80&name=Realized-Logo-Black.png "Realized 1031 Logo") ](https://www.realized1031.com/) - [Wealth Management Gap](https://www.realized1031.com/the-wealth-management-gap) - [Our Process](https://www.realized1031.com/how-realized-works) - [Financial Advisors](https://www.realized1031.com/advisor) - [Resources](https://www.realized1031.com/resources) - [The Company](https://www.realized1031.com/about-us) - [Articles](https://www.realized1031.com/blog) [Register](https://www.realized1031.com/marketplace) [Log In](https://www.realized1031.com/login) - Better Business Bureau Rating: **A+** - [FINRA BrokerCheck](https://brokercheck.finra.org/firm/summary/22333) - [Call](tel:1-877-797-1031) **(877) 797-1031** # Can a Delaware Statutory Trust (DST) Be Gifted to Someone Else? Posted Jul 13, 2025 ![iS-2026177119](https://www.realized1031.com/hs-fs/hubfs/iStock-2026177119-modified-a1e16e05-e2b7-4739-8dd9-7e4c26c27297.jpg?width=2145&height=1206&name=iStock-2026177119-modified-a1e16e05-e2b7-4739-8dd9-7e4c26c27297.jpg) Delaware Statutory Trusts (DSTs) have gained traction among investors for their potential benefits, like passive income and access to institutional real estate. When paired with 1031 exchanges, DSTs may also offer deferral of capital gains taxes which has made them a consideration in certain estate planning and wealth transfer strategies. Given the restrictions put in place by 1031 exchange rules (particularly those outlined by Revenue Ruling 2004-86), DST fractional interests cannot be directly transferred without proper planning. Still, can a Delaware Statutory Trust be gifted to someone else? Yes, under the right circumstances, gifting a DST interest is permissible and may be structured to align with IRS guidelines. Below, Realized 1031 has shared an article detailing the nuances of this transfer to help you prepare and anticipate what comes next. ### So, Can a DST Be Gifted to Someone Else? In estate or tax planning, gifting refers to the transfer of an asset from one individual to another without compensation. This practice requires additional nuance because such transfers may be subject to tax if the amount exceeds IRS limitations. In a [DST](https://www.realized1031.com/blog/dst-risks-and-fees), you own fractional interests of the trust, which then owns an underlying property. And yes, under the right circumstances, you are allowed to [gift these interests](https://www.realized1031.com/blog/can-you-gift-a-1031-exchange-property) to a loved one, friend, or any entity of your choosing. ### Key Tax Considerations for Gifting DST Interest As we mentioned, gifting can come with certain tax complications. Here are some relevant considerations to keep in mind before gifting fractional interests of a DST. ### Gift Tax and Annual Exclusion - The IRS allows you to gift up to [$19,000 to a recipient per year (as of 2025)](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2025) without using any portion of their lifetime gift and estate tax exemption. - You can also provide larger gifts up to [$13.99 million](https://www.empower.com/the-currency/money/gift-tax-explained#:~:text=Gift%20tax%20is%20paid%20by%20the%20giver%20of%20money%20or,exclusion%20and%20a%20lifetime%20exclusion.) — the lifetime exclusion limit as of 2025. DST shares are more likely to follow this category since they are typically worth more than $19,000. - If your cumulative lifetime gifts exceed the federal exemption limit (currently $13.99 million per individual in 2025), the excess may be subject to gift tax at rates ranging from 18% to 40%, depending on the amount. Until that threshold is reached, gifts above the annual exclusion generally reduce your available exemption but do not result in an immediate tax liability. ### Carryover Basis Versus Step-Up - **Gifts during life: **The recipient typically takes your carryover basis, which means any deferred gain from a prior 1031 exchange now shifts to the donee or beneficiary, along with depreciation schedules. Upon the dissolution of the DST, your beneficiary will need to pay capital gains taxes unless they enter another 1031 exchange. - **Transfers at death:** If the DST interest passes through your estate, heirs generally receive a step-up in basis to FMV. This step-up may eliminate much or all of the previously deferred gain for income tax purposes. However, estate tax considerations may apply depending on the size of the estate. Does Gifting Break 1031 Exchange Compliance? This question showcases a common concern for 1031 exchange investors. DST gifting may seem like you’re triggering a taxable event or doing something with the asset before the [traditional holding period is over.](https://www.realized1031.com/blog/what-happens-at-the-end-of-a-delaware-statutory-trust-dst) Thankfully, gifting is still compliant with 1031 exchange rules. ### No Claw-back The IRS respects the original 1031 treatment once the exchange is complete. Subsequent 1031 exchange gifting does not trigger recognition of deferred gain for you. ### Beneficiary’s Future Sales When the recipient eventually disposes of the interest through a sale or other means, any built-in gain becomes taxable to them unless they complete their own 1031. ### Wrapping Up: Delaware Statutory Trust Gifting Basics Gifting your DST interests is allowed, and typically will not trigger a taxable event unless you go over the annual and lifetime limits created by the IRS. Keep in mind, though, that recipients take on the carryover basis of the interests, making them [liable for capital gains taxes](https://www.realized1031.com/blog/how-to-calculate-capital-gains-on-gifted-property) if a 1031 exchange was used to enter the DST. Given the complexity of gift tax rules and the nuances of DST ownership, individuals should consult with tax professionals and 1031 exchange experts before proceeding. *The tax and estate planning information offered by the advisor is general in nature. It is provided for informational purposes only and should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.* *Article written by: Story Amplify. Story Amplify is a marketing agency that offers services such as copywriting across industries, including financial services, real estate investment services, and miscellaneous small businesses.* **Sources:** [https://www.empower.com/the-currency/money/gift-tax-explained](https://www.empower.com/the-currency/money/gift-tax-explained) [https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2025](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2025) [https://www.investopedia.com/terms/g/gift.asp](https://www.investopedia.com/terms/g/gift.asp) Download The Guide To DSTs [![The Investor's Guidebook To DSTs](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/DST-eBook-250.png?width=250&height=250&name=DST-eBook-250.png "See if Delaware Statutory ...") ](https://www.realized1031.com/blog/can-a-delaware-statutory-trust-dst-be-gifted-to-someone-else#blogform) Download eBook ---   --- ### The Investor's Guidebook To DSTs ![Download The Guide To DSTs](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/DST-eBook-550.jpg?width=550&height=650&name=DST-eBook-550.jpg) See if Delaware Statutory Trusts are right for you. By providing your email and phone number, you are opting to receive communications from Realized. If you receive a text message and choose to stop receiving further messages, reply STOP to immediately unsubscribe. Msg & Data rates may apply. To manage receiving emails from Realized visit the Manage Preferences link in any email received. Search ### [Why Realized](https://www.realized1031.com/why-realized) - [Wealth Management](https://www.realized1031.com/the-wealth-management-gap) - [Why Realized](https://www.realized1031.com/why-realized) - [Our Process](https://www.realized1031.com/how-realized-works) - [Scenarios](https://www.realized1031.com/scenarios) - [Private Client Program](https://www.realized1031.com/private-client) - [Realized Exchange Services](https://www.realized1031.com/realized-exchange-services) ### [The Company](https://www.realized1031.com/about-us) - [The Team](https://www.realized1031.com/about-us) - [FAQ](https://www.realized1031.com/frequently-asked-questions) - [Testimonials](https://www.realized1031.com/testimonials) - [Press](https://www.realized1031.com/press) - [Careers](https://www.realized1031.com/careers) ### [Partners](https://www.realized1031.com/partners) - [Financial Advisors](https://www.realized1031.com/advisor) - [Broker Dealers](https://www.realized1031.com/partners/broker-dealers) - [Real Estate Agents](https://www.realized1031.com/partners/real-estate-agents) - [Certified Public Accountants](https://www.realized1031.com/partners/certified-public-accountants) ### [Resources](https://www.realized1031.com/resources) - #### Learn - [Articles](https://www.realized1031.com/blog) - [Glossary of Terms](https://www.realized1031.com/glossary) - [Capital Gains Tax Rates](https://www.realized1031.com/capital-gains-tax-rate) - #### Watch - [Video Library](https://www.realized1031.com/videos) - [Webinar Archive](https://www.realized1031.com/webinars) - #### Read - [Delaware Statutory Trust](https://www.realized1031.com/delaware-statutory-trust) - [Tenants-In-Common](https://www.realized1031.com/tenants-in-common-tic) - [1031 Exchange](https://www.realized1031.com/1031-exchange) - [Qualified Intermediary](https://www.realized1031.com/qualified-intermediary) - [Qualified Opportunity Zones](https://www.realized1031.com/opportunity-zones) #### Realized - 500 W 13th Street Austin, TX 78701 - (877) 797-1031 ##### [Contact Us](https://www.realized1031.com/contact-us) - [![Realized on Facebook](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-facebook-whiterev.png?width=60&height=60&name=social-facebook-whiterev.png)](https://www.facebook.com/Realized/) - [![Realized on LinkedIn](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-linkedin-whiterev.png?width=60&height=60&name=social-linkedin-whiterev.png)](https://www.linkedin.com/company/realized/) - [![Realized on YouTube](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-youtube-whiterev.png?width=60&height=60&name=social-youtube-whiterev.png)](https://www.youtube.com/c/Realized1031?sub_confirmation=1) - [![Realized Holdings, Inc. BBB Business Review](https://www.realized1031.com/hs-fs/hubfs/Images/professional-assoc/bbb/RZH2-bbb-seal.png?width=40&height=65&name=RZH2-bbb-seal.png)](http://www.bbb.org/central-texas/business-reviews/real-estate-investors/realized-holdings-llc-in-austin-tx-1000112948/#bbbonlineclick) - [![FEA Logo](https://www.realized1031.com/hs-fs/hubfs/Images/professional-assoc/fea/RZH2-fea-logo.png?width=82&height=65&name=RZH2-fea-logo.png "FEA Logo")](https://www.1031.org) SECURITIES DISCLOSURE Realized1031.com is a website operated by Realized Technologies, LLC, a wholly owned subsidiary of Realized Holdings, Inc. (“Realized Holdings”). Securities and/or Investment Advisory Services may be offered through Registered Representatives or Investment Advisor Representatives of Realized Financial, Inc. ("Realized"), a broker/dealer, member [FINRA](https://www.finra.org)/[SIPC](https://www.sipc.org/), and registered investment adviser. Realized is a subsidiary of Realized Holdings, Inc. ("Realized Holdings"). Check the background of this firm on [FINRA's BrokerCheck](https://brokercheck.finra.org/firm/summary/22333). Hypothetical example(s) are for illustrative purposes only and are not intended to represent the past or future performance of any specific investment. Investing in alternative assets involves higher risks than traditional investments and is suitable only for sophisticated investors. Alternative investments are often sold by prospectus that discloses all risks, fees, and expenses. They are not tax efficient and an investor should consult with his/her tax advisor prior to investing. Alternative investments have higher fees than traditional investments and they may also be highly leveraged and engage in speculative investment techniques, which can magnify the potential for investment loss or gain and should not be deemed a complete investment program. The value of the investment may fall as well as rise and investors may get back less than they invested. This site is published for residents of the United States who are accredited investors only. Registered Representatives and Investment Advisor Representatives may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed until appropriate registration is obtained or exemption from registration is determined. Not all of services referenced on this site are available in every state and through every representative listed. For additional information, please contact the Realized Compliance department at 512-472-7171 or info@realized1031.com. - [Terms & Conditions](https://www.realized1031.com/terms-and-conditions) - [Privacy Policy](https://www.realized1031.com/privacy-policy) - [Form CRS](https://www.realized1031.com/hubfs/common-files/disclosures/FormCRS.pdf) - [ADV 2A](https://www.realized1031.com/hubfs/common-files/disclosures/ADV2A.pdf) - [Reg BI Disclosures](https://www.realized1031.com/hubfs/common-files/disclosures/RegBI.pdf) -   © 2026 Realized Holdings, Inc. ```json { "@context" : "http://schema.org/", "@type" : "BlogPosting", "articleBody" : "Delaware Statutory Trusts (DSTs) have gained traction among investors for their potential benefits, like passive income and access to institutional real estate. When paired with 1031 exchanges, DSTs may also offer deferral of capital gains taxes which has made them a consideration in certain estate planning and wealth transfer strategies. Given the restrictions put in place by 1031 exchange rules (particularly those outlined by Revenue Ruling 2004-86), DST fractional interests cannot be directly transferred without proper planning. Still, can a Delaware Statutory Trust be gifted to someone else? Yes, under the right circumstances, gifting a DST interest is permissible and may be structured to align with IRS guidelines. Below, Realized 1031 has shared an article detailing the nuances of this transfer to help you prepare and anticipate what comes next. So, Can a DST Be Gifted to Someone Else? In estate or tax planning, gifting refers to the transfer of an asset from one individual to another without compensation. This practice requires additional nuance because such transfers may be subject to tax if the amount exceeds IRS limitations. In a DST, you own fractional interests of the trust, which then owns an underlying property. And yes, under the right circumstances, you are allowed to gift these interests to a loved one, friend, or any entity of your choosing. Key Tax Considerations for Gifting DST Interest As we mentioned, gifting can come with certain tax complications. Here are some relevant considerations to keep in mind before gifting fractional interests of a DST. Gift Tax and Annual Exclusion The IRS allows you to gift up to $19,000 to a recipient per year (as of 2025) without using any portion of their lifetime gift and estate tax exemption. You can also provide larger gifts up to $13.99 million — the lifetime exclusion limit as of 2025. DST shares are more likely to follow this category since they are typically worth more than $19,000. If your cumulative lifetime gifts exceed the federal exemption limit (currently $13.99 million per individual in 2025), the excess may be subject to gift tax at rates ranging from 18% to 40%, depending on the amount. Until that threshold is reached, gifts above the annual exclusion generally reduce your available exemption but do not result in an immediate tax liability. Carryover Basis Versus Step-Up Gifts during life: The recipient typically takes your carryover basis, which means any deferred gain from a prior 1031 exchange now shifts to the donee or beneficiary, along with depreciation schedules. Upon the dissolution of the DST, your beneficiary will need to pay capital gains taxes unless they enter another 1031 exchange. Transfers at death: If the DST interest passes through your estate, heirs generally receive a step-up in basis to FMV. This step-up may eliminate much or all of the previously deferred gain for income tax purposes. However, estate tax considerations may apply depending on the size of the estate. Does Gifting Break 1031 Exchange Compliance? This question showcases a common concern for 1031 exchange investors. DST gifting may seem like you’re triggering a taxable event or doing something with the asset before the traditional holding period is over. Thankfully, gifting is still compliant with 1031 exchange rules. No Claw-back The IRS respects the original 1031 treatment once the exchange is complete. Subsequent 1031 exchange gifting does not trigger recognition of deferred gain for you. Beneficiary’s Future Sales When the recipient eventually disposes of the interest through a sale or other means, any built-in gain becomes taxable to them unless they complete their own 1031. Wrapping Up: Delaware Statutory Trust Gifting Basics Gifting your DST interests is allowed, and typically will not trigger a taxable event unless you go over the annual and lifetime limits created by the IRS. Keep in mind, though, that recipients take on the carryover basis of the interests, making them liable for capital gains taxes if a 1031 exchange was used to enter the DST. Given the complexity of gift tax rules and the nuances of DST ownership, individuals should consult with tax professionals and 1031 exchange experts before proceeding. The tax and estate planning information offered by the advisor is general in nature. It is provided for informational purposes only and should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation. Article written by: Story Amplify. Story Amplify is a marketing agency that offers services such as copywriting across industries, including financial services, real estate investment services, and miscellaneous small businesses. Sources: https://www.empower.com/the-currency/money/gift-tax-explained https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2025 https://www.investopedia.com/terms/g/gift.asp", "articleSection" : [ "Delaware Statutory Trusts (DST)" ], "author" : { "@type" : "Person", "email" : "marketing@realized1031.com", "image" : "", "name" : "The Realized Team", "url" : "https://www.realized1031.com/blog/author/the-realized-team" }, "dateModified" : "2025-07-13T14:00:01+0000", "datePublished" : "2025-07-13T14:00:00+0000", "description" : "Learn more about can a Delaware Statutory Trust (DST) be gifted to someone else?", "headline" : "Can a Delaware Statutory Trust (DST) Be Gifted to Someone Else?", "image" : { "@type" : "ImageObject", "height" : 1206, "url" : "https://733513.fs1.hubspotusercontent-na1.net/hubfs/733513/iStock-2026177119-modified-a1e16e05-e2b7-4739-8dd9-7e4c26c27297.jpg", "width" : 2145 }, "mainEntityOfPage" : "https://www.realized1031.com/blog/can-a-delaware-statutory-trust-dst-be-gifted-to-someone-else", "name" : "Can a Delaware Statutory Trust (DST) Be Gifted to Someone Else?", "publisher" : { "@type" : "Organization", "address" : { "@type" : "PostalAddress", "addressCountry" : "USA", "addressLocality" : "Austin", "addressRegion" : "TX", "postalCode" : "78701", "streetAddress" : "500 W 13th Street " }, "logo" : { "@type" : "ImageObject", "height" : 60, "url" : "http://www.realized1031.com/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black-No-Margin-296x60-AMP.png", "width" : 296 }, "name" : "Realized" }, "thumbnailUrl" : "https://733513.fs1.hubspotusercontent-na1.net/hubfs/733513/iStock-2026177119-modified-a1e16e05-e2b7-4739-8dd9-7e4c26c27297.jpg" } ```