DST Interests represent equity ownership in a large property by multiple investors through an investment structure known as a Delaware Statutory Trust (DST).
Holding DST interests is similar to holding interests or shares in a limited partnership or limited liability company (LLC) in the sense that it represents co-ownership of a property with other investors. A major difference of a Delaware Statutory Trust (DST) as an ownership structure is its eligibility for 1031-exchange investment.
Tax treatment of DSTs permits investors to exchange into a DST on a tax-deferred basis and likewise, permits investors to exchange out of a DST into a subsequent DST or property. A Delaware Statutory Trust (DST), Tenants-in-Common, or sole ownership are currently the only holding structures that receive such tax treatment pertaining to 1031-exchanges. Limited partnerships, limited liability companies (LLCs), corporations and Real Estate Investment Trust (REITs) are not eligible for 1031-exchanges.
Investors in Delaware Statutory Trusts hold Beneficial Interests in the Trust which in turn owns the property. The amount of the interest held in a DST is expressed as a percentage of the total equity of a particular offering.
For example, if an offering totals $30,000,000 but is capitalized using $20,000,000 of debt and $10,000,000, then ownership interests will be based on the $10,000,000 (equity) figure. In this example, if an investor contributed $250,000 of equity, they would own a 2.5% interest ($250,000 investment divided by $10,000,000 total equity) in the DST.
The Investor's Guidebook To DSTs
See if Delaware Statutory Trusts are right for you.
Realized1031.com is a website operated by Realized Technologies, LLC, a wholly owned subsidiary of Realized Holdings, Inc. (“Realized”). Securities offered on this website are offered exclusively through Thornhill Securities, Inc., a registered broker/dealer and member of FINRA/SIPC("Thornhill"). Investment advisory services are offered through Thornhill Securities, Inc. a registered investment adviser. Thornhill Securities, Inc. is a subsidiary of Realized. Check the background of this firm on FINRA's BrokerCheck.
Realized does not provide tax or legal advice. Tax topics discussed are for educational purposes only and are not a substitute for professional tax advice. You should discuss your personal situation with a tax or legal professional.
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 the services referenced on this site are available in every state and through every representative listed. For additional information, please contact 877-797-1031 or firstname.lastname@example.org.