1031 Exchanges · Delaware Statutory Trusts · Tax Deferral
1031 Property Selection for Accredited Investors
Plain-language education on 1031 exchanges, Delaware Statutory Trusts and capital gains tax deferral, from Toni Sutherland, Registered Representative, Alta Investment Group.
Book a call with ToniWhat Investors Weigh in a 1031 Exchange: Tax Deferral, Potential Income, Diversification, and Management Relief
Tax Deferral
A properly structured 1031 exchange defers capital gains tax on the sale of investment property. The tax is postponed, not forgiven, and deferring it can keep more of the sale proceeds working in replacement property.
Diversification
Because DST interests are sold in fractional amounts, an accredited investor may be able to spread exchange proceeds across more than one property, asset class, location or sponsor. Diversification does not assure a profit or protect against loss.
Management Relief
Many long-term owners have grown tired of managing aging rental property. A DST investor has no day-to-day landlord responsibilities, because the sponsor and its property manager run the property. The trade-off is that investors have no say in management decisions.
Ease of Identification
DST properties are typically acquired and financed by the sponsor before interests are offered, which can make identification within the 45-day window simpler. It does not remove the risk that an offering fills or closes before your exchange does.
Larger, Professionally Managed Real Estate
A DST lets accredited investors pool capital with other investors to own beneficial interests in larger, professionally managed real estate than many could buy on their own.
Talk It Through with Toni
Specific offerings are never shown publicly. They are discussed only one to one, after Toni has established that you are an accredited investor and that a DST may be suitable. Book a 30-minute call and Toni will call you at the time you choose.
DST interests are offered only by private placement memorandum to accredited investors. They are speculative and illiquid, distributions are not guaranteed, fees reduce returns, and investors can lose some or all of their investment.
Book a call with ToniWho Is Behind 1031 Property Selection?
Toni Sutherland is a registered representative (CRD 2729672) at Alta Investment Group in Aptos, California, and has been registered in the securities industry since 1996. Toni has passed the Series 7, 6, 63 and 65 exams. 1031 Property Selection is a marketing name of Alta Investment Group, and this site explains 1031 exchanges, Delaware Statutory Trusts and the related tax rules in plain language. Securities offered through Emerson Equity LLC, Member FINRA/SIPC. You can check Toni's background on FINRA BrokerCheck.
1031 & DST Questions, Answered
What is a 1031 exchange?
A 1031 exchange lets an owner of real property held for investment or business use sell it and defer federal capital gains tax (and state tax, where the state follows the federal rule) by reinvesting the proceeds in like-kind replacement property through a qualified intermediary, following the Section 1031 rules and deadlines. The tax is deferred, not forgiven.
What are the 1031 exchange deadlines?
You must identify replacement property within 45 days of selling your relinquished property, and close on it by the earlier of 180 days after the sale or the due date (with extensions) of your tax return for the year of the sale. Both clocks start on the closing date of the sale and run at the same time. Extensions are generally not available except for federally declared disasters.
What is a Delaware Statutory Trust (DST)?
A DST is a legal entity that holds larger, professionally managed real estate and lets multiple investors own fractional, passive beneficial interests with no day-to-day management. A properly structured DST interest can qualify as like-kind replacement property in a 1031 exchange. DST interests are securities offered only to accredited investors, and investors give up control over the property.
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