Building a Passive Real Estate Sleeve: Allocation Models and Rebalancing Considerations
Real estate investment is a popular choice for those looking to build a robust, passive income stream. As with any investment strategy, a thoughtful approach to asset allocation and rebalancing is central to maximizing returns and mitigating risks. Here, we explore effective allocation models and the nuances of rebalancing for those looking to create a passive real estate sleeve.
DST Reserves, Return of Capital, and Their Impact on Adjusted Basis
When you choose to invest in Delaware Statutory Trusts (DSTs) for tax deferral or passive income benefits, your attention is usually entirely on the tax benefits and profitability. However, the finer details (like reserves and return of capital) also deserve your close inspection, because these can affect your DST adjusted basis and, by extension, long-term tax outcomes.
Passive Losses and DSTs: What Happens to Suspended Losses After an Exchange?
Investors who want benefits like tax deferral and passive income find Delaware Statutory Trusts (DSTs) an appealing and suitable option. During your investment, however, you may encounter passive losses, particularly from the depreciation of the underlying DST properties. This accounting consideration raises a question: what happens to suspended losses after an exchange?
Meeting 1031 Debt-Replacement Requirements Using DST Financing
A 1031 exchange is a promising strategy that helps investors defer capital gains taxes while acquiring new property, but this transaction involves many rules. One important yet often overlooked aspect of the transaction is debt replacement, as it doesn’t always apply. However, for properties that do have debt, failing to replace it when acquiring a new asset can result in tax liability. Thankfully, solutions are available, including financing built for Delaware Statutory Trusts (DSTs).
How Zero-Coupon DST Loans Affect Basis, Cash Flow, and Exit
Delaware Statutory Trusts (DSTs) are a popular option for investors seeking passive income, enhanced diversification, and access to institutional-grade assets. Among the many considerations to keep in mind before entering one is the financing structure. Amortized financing is the most common, but some DSTs also use a zero-coupon loan structure.
Coordinating Your Qualified Intermediary and DST Sponsor: Paperwork, Escrows, and Assignments
In a 1031 exchange completed through a Delaware Statutory Trust (DST), two entities matter: the qualified intermediary and the DST sponsor. Seamless coordination must happen between the two to ensure compliance with IRS rules and increase the chances of a successful exchange. There are various key areas where these parties will need to work together. Let’s take a look at what you need to know as an investor.
