Unlock Powerful Tax deferment with our Delaware Statutory Trust (DST) Products
NestVest proudly offers Delaware Statutory Trust (DST) investment opportunities specifically designed for investors looking to leverage tax-deferred benefits through 1031 exchanges.
What is a Delaware Statutory Trust (DST)?
A Delaware Statutory Trust (DST) is a specialized legal entity widely utilized in 1031 exchanges, allowing investors to defer capital gains taxes incurred from the sale of investment properties by reinvesting in replacement properties. DSTs facilitate fractional ownership, enabling multiple investors to collectively invest in institutional-quality real estate without direct property ownership.
Key Uses of DSTs in a 1031 Exchange
Investors in a DST hold beneficial interests in the trust rather than direct title to the property. The DST directly owns and manages the real estate asset, while investors enjoy fractional ownership through their beneficial interest in the trust.
DST investments facilitate the deferral of capital gains taxes when investors exchange one property for another. Provided the investment adheres to IRS guidelines under Section 1031, investors can transition from a relinquished property to a DST replacement property without triggering taxable events.
DSTs are ideal for investors seeking a passive role. Professional sponsors or trustees manage all property-related responsibilities, including acquisition, financing, ongoing management, and eventual disposition of the asset, allowing investors to benefit without active involvement.
To qualify for a 1031 exchange, DST investments must comply with specific IRS guidelines, primarily requiring that investors do not exert control over day-to-day property operations. DST structures inherently meet this criterion by employing professional management teams.
DSTs aggregate funds from multiple investors, enabling the acquisition of larger, more substantial properties, such as commercial real estate, office buildings, and multifamily residential complexes. Investors gain access to diversified portfolios, mitigating risk through fractional ownership in various real estate assets.
DST Benefits at a Glance
Capital Gains Tax Deferral
Passive Investment Structure
Institutional-Quality Assets
Portfolio Diversification
Frequently Asked Questions
Who manages the property in a DST?
A professional trustee or sponsor is responsible for managing all aspects of the property, including acquisition, financing, management, and eventual sale.
Can I use DST investments as part of my 1031 exchange?
Yes, DSTs are specifically designed to meet IRS requirements for 1031 exchanges, allowing investors to defer capital gains taxes effectively.
What types of properties are typically available in DST investments?
DSTs commonly offer institutional-quality real estate such as multifamily housing, office buildings, retail centers, and commercial properties.
Do I have control over day-to-day property decisions in a DST?
No, investors must remain passive. Professional management teams handle daily operational decisions to comply with IRS guidelines.
Is there a minimum investment amount for a DST?
How long is my investment tied up in a DST?
How do DST investments provide diversification?
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