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.
Is a Delaware Statutory Trust Revocable?
Investing in a Delaware Statutory Trust (DST) can be an appealing strategy for many investors because of potential benefits like passive income and diversification. There may also be tax-deferral benefits if you enter the DST through a 1031 exchange. However, the structure of this “trust” may make it confusing, especially in the context of estate planning. In particular, many investors wonder if DSTs are revocable.
What To Look for in a Delaware Statutory Trust (DST) Attorney
As you consider investing through a Delaware Statutory Trust (DST), it's important to involve experienced professionals to help manage the legal and tax-related aspects of the process. One of these professionals would be a Delaware Statutory Trust attorney — a lawyer who is knowledgeable in the legal aspects of the investment. Hiring one can help you evaluate offering documents, understand your rights as a beneficial interest holder, and assess whether the DST aligns with applicable IRS guidance and your overall transaction objectives.
Comparing Deferred Sales Trusts and Delaware Statutory Trusts
Investors exploring tax-deferral strategies for appreciated real estate have several options to consider. Two common approaches are the deferred sales trust and the Delaware Statutory Trust. These are both called DSTs, which may lead to confusion. However, these two tax strategies are distinct and offer different tax deferral methods.
