Selling an investment property and completing an IRC Sec. 1031 exchange can be a complicated transaction. We simplify the process, help you understand your choices, and articulate the impact on your situation and financial plans.
We can coordinate with the qualified intermediary, title company, and your CPA to make the exchange process as straightforward and efficient as possible.
Defer Capital Gains Tax with a 1031 Exchange:
Section 1031 of the Internal Revenue Code allows an investor to defer the payment of capital gains taxes that may arise from the sale of an investment property. By using the proceeds of the sale of such property to purchase “like-kind” real estate, taxes may be deferred, as long as the investor satisfies certain conditions.
Delaware Statutory Trusts (DSTs) are the partial ownership structure of choice for investors who no longer want to play an active role in the management of their real estate investments.
DSTs permit fractional ownership where multiple investors can share ownership in a single property or a portfolio of properties. Interests in a DST qualify as replacement property as part of an investor’s 1031 exchange transaction.
DSTs take decision-making out of the hands of investors and place it into the hands of an experienced sponsor-affiliated trustee.
Potential DST 1031 Exchange Benefits
Defer Taxes – by completing a 1031 exchange, potential taxes on the sale of the property may be deferred (capital gains and depreciation recapture)
Preserve Capital – a completed 1031 exchange may provide the opportunity to reinvest all of the sale proceeds, rather than losing a portion for tax liability
Generate Cash Flow – depending on the type of replacement property, the potential for regular cash flow from the DST investment
No Management Responsibilities – the DST manages the investment on behalf of investors
Access to Institutional Quality Real Estate – fractional ownership allows investors to acquire ownership interests in larger properties than they could on their own
Limited Personal Liability – any loans associated with real estate owned in a DST are nonrecourse to the investors
Diversification – investors can divide their 1031 exchange across multiple DSTs, with potential diversification geographically and across multiple asset classes (multifamily, industrial, etc.)
Ongoing Exchange Capability – the DST structure allows investors to continue to exchange in the future, often until the investor’s death when their heirs receive a step-up in cost basis and the deferred capital gains are eliminated
1031 Exchange Timeline
We simplify the 1031 exchange process, helping you maintain compliance and maximize tax benefits. To take advantage of benefits, the entire timeline can take no longer than 180 days. Our team supports you every step of the way:
Three Basic Steps for Investors with a Property to Exchange
Day 1 Sale of Relinquished Property
By Day 45 of Replacement Property
By Day 180
Exchanger sells property, known as a relinquished property, and proceeds are escrowed with a qualified intermediary (QI).
Qualified intermediary, through a written agreement with the investor, transfers funds for purchase of replacement property.
Exchanger receives beneficial interest in a DST.
Let's start a conversation
If you’re considering selling a property and want to better understand the 1031 exchange process and investment options, we can help.
