Chaining Exchanges: Moving From One DST to Another Without Busting Your 1031
As you likely know, Delaware Statutory Trusts (DSTs) offer various advantages, like passive income and diversification. The fact that DSTs have holding periods, however, means a taxable event is always on the horizon. Thankfully, strategies like chaining exchanges are allowed, so you can move from one DST to another through 1031 exchanges, ensuring that you maintain your tax-deferral benefits.
Proceeds at DST Exit: Return of Capital vs. Gain and How This Shows Up on Your Tax Forms
At the end of a Delaware Statutory Trust (DST), the DST sponsor sells the assets and distributes the proceeds to the holders of beneficial interests. If you’re an investor, it’s crucial to know the difference between the original capital and gain from appreciation because of the different tax treatment and reporting requirements. Having this knowledge helps you prepare for your tax obligations and streamline your exit strategy after the full cycle event.
Rolling a DST Into an UPREIT via Section 721: Typical Holding Periods and Tax Trade-Offs
Investing in Delaware Statutory Trusts (DSTs) offers a range of benefits, like passive income and diversification. However, you may reach a point where you want to move beyond the advantages of just DSTs and gain access to larger real estate portfolios. One strategy you can use is rolling a DST into an umbrella partnership real estate investment trust (UPREIT).
Selling Fractional Interests: How Seasoned DST Interests Are Treated Off-Platform
Delaware Statutory Trusts (DSTs) are popular because of their passive nature, tax-deferral benefits, and opportunities for long-term cash flow. However, certain circumstances require you to liquidate your DST interests before the holding period is over. Whatever your reason, it’s important to understand how off-platform selling for fractional interest occurs, including the challenges and trade-offs you may encounter.
Exchanging Out of Self-Managed Rentals Into DSTs: Shifting From Active to Passive Without Breaking 1031
Owning and managing a rental property on your own can be challenging. From handling tenants to ensuring the property retains its value, there are lots of tasks and responsibilities that may lead to burnout. You may be considering letting go to ease the burden, but if the property has been acquired through a 1031 exchange, capital gains taxes will be triggered.
What DST Liquidation Looks Like: Timing, Distributions, and Tax Reporting
A Delaware Statutory Trust (DST) has a defined holding period of 5 to 10 years, in which the investment will provide passive income and tax-deferral benefits. Once that’s over, the liquidity event occurs, wherein the sponsor dissolves the DST, sells the properties, and distributes the proceeds to beneficial interest holders.
