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1031 Exchanges

1031 Exchanges and Delaware Statutory Trusts (DST)

A tax-deferred approach to selling your real estate investments

Image of house with increasing stacks of coins showing increasing investment

The 1031 exchange is thought by many to be one of the more powerful tax deferral tools currently available. Under the Internal Revenue Code Section 1031, taxpayers may be able to defer the capital gains tax on the sale of appreciated investment property if they reinvest the proceeds in “like-kind” property. Almost any property that is held for business or investment purposes may qualify as “like-kind” including apartments, single-family rentals, land, office, industrial, storage, retail and hotel properties, among others.

A Delaware Statutory Trust (DST) may be used to complete a 1031 exchange.

A DST may offer potential benefits that might be attractive to someone selling appreciated real estate. In addition to allowing the individual to defer taxes, a DST might offer the following:

Hands of two people holding model homes in their hands preparing to exchange properties

Monocot Wealth Management provides clients access to DST properties in a number of states.

Of course, a DST is not without risk and is not for everyone. As with any investment, it is important to understand the risks and weigh them against the potential benefits with the help of the right investment, legal and tax professionals.

This material is neither an offer to sell nor the solicitation to purchase any security. The information is for discussion and information purposes only. It is not intended to replace competent legal, tax or financial planning advice. The applicable tax codes apply to and relate to federal law only. Individual states may have their own additional tax codes. Please contact the appropriate tax and legal professional in your state. This information is provided from sources believed to be reliable but should be used in conjunction with professional advice that is consistent with your personal situation.

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