Why DST's and 1031 Exchanges?
A Delaware Statutory Trust (DST) is a distinct legal entity created under Delaware law that permits fractional ownership of real estate assets that may be used in a 1031 Exchange. However, to use a DST in a 1031 Exchange syndication program, it must comply with the requirements of IRS Revenue Ruling 2004-86, so that a beneficial interest in the trust is treated as an undivided fractional interest in real estate for federal income tax purposes (as opposed to a security or other prohibited interest under Section 1031). An Exchanger can defer taxes by investing in a DST rather than in a whole property.
DST BENEFITS:
Monthly rental income*
No toilets, tenants or trash headaches
No burdens of property management
Properties nationwide
Guidance through process with FINRA licensed registered representative
Portfolio diversification
Investors should partner with an experienced financial advisor to help ensure their complex DST 1031 Exchange is executed properly.
Process of a Typical 1031
Step 1
DECIDE TO EXCHANGE
I need to sell my investment property, but I don’t want to pay the capital gains taxes, so I am going to complete a 1031 exchange.
Step 2
SELL PROPERTY
When I relinquish my property, I can’t take receipt of the proceeds, so I will have the funds held by a Qualified Intermediary.
Step 3
IDENTIFY PROPERTY
Once the Qualified Intermediary holds the proceeds from the sale, I’ll work with my broker or investment advisor to identify suitable replacement properties.
Step 4
BUY PROPERTY
Once I decide which of the identified properties to acquire, the Qualified Intermediary will forward the funds for the closing.
Exchange Options
FRACTIONAL OWNERSHIP
Fractional ownership options are available and is an increasingly popular.co-ownership structure which Typical investments included are in Triple Net Leased and multi-family properties.
They could be offered with one property or a diversified portfolio of properties with minimum investments as low as $100,000.
TRIPLE NET LEASE
With a Triple Net Lease the tenant, in addition to lease payments, is responsible for all property related expenses including maintenance, repairs, insurance, and taxes.
Triple Net Lease properties are available in both individual and co-ownership structures.
Your Future is our Business.
Every 1031 exchange is different. I take great pride in providing people with the best solutions available based on their individual needs to enable them to have a compliant exchange.
Call or write anytime to see what DST's look like for you. When suitable, like for retirees or for someone with leftover boot money, they can be a solid solution. Learn more today on how you can use fractional ownership in institutional-grade real estate to help plan your future.
Peter D. Chernin, Registered Representative
Testimonials
“I valued Peters expertise working with me through my 1031 exchange and I’m very happy with my DST investment.”
“Peter is very well educated in the 1031 exchange space and DST’s. He’s been helpful to me through multiple 1031 exchanges. I plan on working with him for many years to come.”
“Peter was a greatly valued asset when it came to our complex 1031 exchange. We are very happy with his help.”
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