--- title: Using DSTs and QOZs as an ‘Exit Ramp’ Without Losing Income description: Learn more about Using DSTs and QOZs as an ‘Exit Ramp’ Without Losing Income image: https://www.realized1031.com/hubfs/iStock-2225014353-modified-5ea3b1b7-2cca-48be-b2f5-1c270d99197d.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** # Using DSTs and QOZs as an ‘Exit Ramp’ Without Losing Income Posted Mar 25, 2026 ![iS-2225014353](https://www.realized1031.com/hs-fs/hubfs/iStock-2225014353-modified-5ea3b1b7-2cca-48be-b2f5-1c270d99197d.jpg?width=2120&height=1192&name=iStock-2225014353-modified-5ea3b1b7-2cca-48be-b2f5-1c270d99197d.jpg) As an investment property owner, navigating the complex landscape of real estate can feel overwhelming, especially when considering exit strategies that do not compromise income. [Delaware Statutory Trusts (DSTs) and Qualified Opportunity Zones (QOZs)](https://www.realized1031.com/blog/how-to-talk-to-your-cpa-about-1031-exchanges-dsts-and-qozs-checklist-questions) present unique vehicles that can seamlessly transition your assets while deferring taxes and maintaining income, akin to taking an "exit ramp" on your investment journey. ### Understanding DSTs and Their Benefits DSTs are a popular option for those aiming to shift away from active property management responsibilities. Through a DST, investors can enjoy fractional ownership in high-value commercial properties without the burdens of day-to-day management. This passive investment approach is appealing for those nearing retirement or looking to enjoy their income without the demands of property oversight. A major advantage of DSTs is the ability to utilize the [IRS-sanctioned 1031 Exchange](https://www.realized1031.com/blog/how-does-the-irs-classify-and-regulate-1031-exchanges). This allows property owners to defer capital gains taxes by reinvesting proceeds into a "like-kind" property. As DSTs qualify for 1031 Exchanges, you can sell your property and reinvest in a diversified portfolio of commercial properties, thus deferring taxes and securing a consistent income stream through regular distributions. While these distributions are not guaranteed, DSTs typically provide scheduled payouts, offering financial stability for investors. Moreover, DSTs offer flexibility in investment amounts, making them accessible and easier to manage. They provide an institutional-grade investment experience, opening doors to assets that might otherwise be out of reach for individual investors. They are especially beneficial for estate planning by offering fractional interests that can be easily distributed among heirs, mitigating potential family disputes over asset division. ### Exploring the Potential of QOZs On the other hand, QOZs represent a different kind of investment opportunity, particularly aimed at incentivizing economic development in underserved areas. Established under the 2017 Tax Cuts and Jobs Act, investing in QOZs provides significant tax benefits. Investors can defer taxes on capital gains until 2026 by rolling them over into a [Qualified Opportunity Fund (QOF](https://www.realized1031.com/blog/are-distributions-from-a-qualified-opportunity-fund-qof-taxable)). If held for at least ten years, any appreciation is tax-free upon sale. QOZs are typically geared toward investors willing to participate in long-term developmental projects. While they are riskier due to the nature of ground-up developments, the potential returns can be robust, especially if the project successfully transforms the depressed area. Notably, QOZ investments are not limited to real estate proceeds, allowing a broader range of capital gains to be reinvested. ### Weighing the Investments Both DSTs and QOZs serve as effective exit strategies for property owners looking to defer capital gains taxes while retaining income potential. DSTs are more suited for investors seeking passive income and a more predictable investment, with the added benefit of leveraging the 1031 Exchange. In contrast, QOZs are ideal for those ready to embrace longer-term, higher-risk opportunities in exchange for potentially substantial tax benefits and returns. It's essential to assess your investment goals, risk tolerance, and long-term financial plans when considering these options. Consulting with a financial advisor can provide personalized insights to ensure that the chosen path aligns with your objectives, ultimately creating an exit strategy that preserves both your wealth and peace of mind. Learn Ways To Help Build Long-Term Real Estate Wealth [![Get Tips For Managing Real Estate Wealth](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/IPWM-eBook-250c.jpg?width=250&height=250&name=IPWM-eBook-250c.jpg "Learn new ways to use real ...") ](https://www.realized1031.com/blog/using-dsts-and-qozs-as-an-exit-ramp-without-losing-income#blogform) Download eBook ---   --- ### Get Tips For Managing Real Estate Wealth ![Learn Ways To Help Build Long-Term Real Estate Wealth](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/IPWM-eBook-550.jpg?width=550&height=650&name=IPWM-eBook-550.jpg) Learn new ways to use real estate to pursue your wealth goals. 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Delaware Statutory Trusts (DSTs) and Qualified Opportunity Zones (QOZs) present unique vehicles that can seamlessly transition your assets while deferring taxes and maintaining income, akin to taking an \"exit ramp\" on your investment journey. Understanding DSTs and Their Benefits DSTs are a popular option for those aiming to shift away from active property management responsibilities. Through a DST, investors can enjoy fractional ownership in high-value commercial properties without the burdens of day-to-day management. This passive investment approach is appealing for those nearing retirement or looking to enjoy their income without the demands of property oversight. A major advantage of DSTs is the ability to utilize the IRS-sanctioned 1031 Exchange. This allows property owners to defer capital gains taxes by reinvesting proceeds into a \"like-kind\" property. As DSTs qualify for 1031 Exchanges, you can sell your property and reinvest in a diversified portfolio of commercial properties, thus deferring taxes and securing a consistent income stream through regular distributions. While these distributions are not guaranteed, DSTs typically provide scheduled payouts, offering financial stability for investors. Moreover, DSTs offer flexibility in investment amounts, making them accessible and easier to manage. They provide an institutional-grade investment experience, opening doors to assets that might otherwise be out of reach for individual investors. They are especially beneficial for estate planning by offering fractional interests that can be easily distributed among heirs, mitigating potential family disputes over asset division. Exploring the Potential of QOZs On the other hand, QOZs represent a different kind of investment opportunity, particularly aimed at incentivizing economic development in underserved areas. Established under the 2017 Tax Cuts and Jobs Act, investing in QOZs provides significant tax benefits. Investors can defer taxes on capital gains until 2026 by rolling them over into a Qualified Opportunity Fund (QOF). If held for at least ten years, any appreciation is tax-free upon sale. QOZs are typically geared toward investors willing to participate in long-term developmental projects. While they are riskier due to the nature of ground-up developments, the potential returns can be robust, especially if the project successfully transforms the depressed area. Notably, QOZ investments are not limited to real estate proceeds, allowing a broader range of capital gains to be reinvested. Weighing the Investments Both DSTs and QOZs serve as effective exit strategies for property owners looking to defer capital gains taxes while retaining income potential. DSTs are more suited for investors seeking passive income and a more predictable investment, with the added benefit of leveraging the 1031 Exchange. In contrast, QOZs are ideal for those ready to embrace longer-term, higher-risk opportunities in exchange for potentially substantial tax benefits and returns. It's essential to assess your investment goals, risk tolerance, and long-term financial plans when considering these options. 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