Structure of a DST

RealtyMogul Vice President Stephen Haskell walks you through the “Structure of a DST” detailing what property managers can and cannot do in a DST, the pros and cons of a DST., and IRS restrictions regarding DSTs.

Interested in learning more? Please contact our team of 1031 specialists.

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Accreditation and
Liquidity

Learn the questions to ask to understand if you are an accredited investor, and better understand the liquidity of a DST.

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The Seven Deadly
Sins of a DST

Understand what property management can and cannot do in a DST.

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Master Tenant Lease
Structure

Understand the DSTs master tenant lease structure, why it’s important, and what it means for investors

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The Springing LLC
Feature

The DST’s “break glass in case of emergency,” and its potential consequences

Explore articles on the Structure of a DST

1031 Exchange

A Critical Review of the Seven Deadly
Sins of a Delaware Statutory Trust (DST)

The concept of the “Seven Deadly Sins” of a Delaware Statutory Trust (DST) refers to specific activities that a DST sponsor must avoid to maintain the trust’s tax-advantaged status under IRS Revenue Ruling 2004-86. These restrictions are crucial for ensuring the DST qualifies for 1031 exchange purposes. In some ways, these rules force sponsor transparency and limit the opportunity for a sponsor to mismanage an asset. However, it can also be restrictive, limit upside potential, and pose challenges for certain investments. Below is a critical examination of these seven prohibitions:

1031 Exchange

DST vs QOZ

Investors selling a business, art, stock, or other non-real estate assets may want to consider a QOF, since the 1031 is no longer available to any asset class besides real estate. For real estate owners who would like to defer all their taxes indefinitely and potentially pass their assets onto their heirs tax free, a 1031 exchange and a DST investment may be more appropriate. Either way, there are various potential advantages for both investment vehicles. However, these are complicated tax strategies, and investors should first speak to their CPA/tax advisor prior to conducting a 1031 exchange or investing in a QOF to make sure it is appropriate for them and their families’ financial goals and objectives.

1031 Exchange

How 1031 Investors Could Benefit From Opportunity Zone Investments

Real estate investors could defer paying capital gains tax by conducting a tax-deferred exchange. While that is still the case, today, Opportunity Zone investments could serve as a viable alternative for 1031 investors. This article discusses how investors considering a 1031 exchange may benefit from investing in replacement property in an Opportunity Zone and the key differences to be aware of.

1031 Exchange

TIC or DST

When comparing investment structures like Delaware Statutory Trusts (DSTs) and Tenancy-in-Common (TICs), it’s crucial to examine several key factors, including liquidity, certainty of close, tax reporting, financing structure, and associated costs and fees. Both DSTs and TICs allow multiple investors to own fractional interests in larger properties, yet they differ significantly in how they handle these aspects. Understanding these differences can help investors make informed decisions about which structure best suits their investment goals and risk tolerance.

1031 Exchange

Understanding DSTs, TICs
and U.S. Code § 1031

We explore 1031 Exchange vehicles such as Delaware Statutory Trusts (DSTs) and Tenancy-In-Common (TICs), discuss important considerations for DSTs, and the tax benefits that 1031 exchanges can have for commercial real estate investors.

1031 Exchange

What Is a 1031 Exchange and Why Is It Important?

If an individual exchanges one investment property for another via a 1031 exchange, they may be able to defer capital gains or losses that they would otherwise have to pay at the time of sale.

Interested in learning more? Watch the video series: Managing Debt in a DST

DISCLOSURE

1031 EXCHANGE RISK: Internal Revenue Code Section 1031 (“Section 1031”) contains complex tax concepts, and certain tax consequences may vary depending on the individual circumstances of each investor. Section 1031 rules that must be carefully followed to qualify for a 1031 exchange. We strongly encourage you to seek guidance from both a qualified intermediary (QI) and a tax professional to navigate his process and ensure compliance with relevant regulations. Please note that RealtyMogul does not provide tax advice.

As part of its 1031 Exchange Concierge services, RM Securities, LLC will provide issuer-prepared materials concerning certain prospective 1031 Exchange products that have not yet been approved by RM Securities, LLC. Any such prospective 1031 Exchange products, and any investment in such products, must be approved by RM Securities, LLC prior to executing any transaction therein. Additionally, any issuer-prepared materials, including issuer offering documents are prepared by the issuer or sponsor of the 1031 Exchange opportunity, and not by RM Securities, LLC. RM Securities, LLC and its associated persons did not assist in preparing, do not explicitly or implicitly adopt or endorse, and are not otherwise responsible for such issuer-prepared materials or any content therein.