Estate planning using DSTs

Considerations for using a Delaware Statutory Trust in estate planning A Delaware Statutory Trust (DST) is a legal entity that can be used for various purposes, including real estate investments and, in some cases, estate planning. When it comes to estate planning, DSTs are often employed in the context of 1031 exchanges, which allow individuals […]

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Understanding the Power of UPREITs in Real Estate Investment

Real estate investment has long been a favored avenue for potential appreciation and steady cash flow. However, as investment goals evolve or specific real estate holdings mature, the prospect of capital gains taxes and depreciation recapture becomes a concern. One strategic solution gaining traction is the Umbrella Partnership Real Estate Investment Trust (UPREIT) option within […]

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What is a “Reverse 1031 Exchange”

Unlike a standard 1031 exchange, where a property owner sells their property and then acquires a replacement property, a reverse 1031 exchange involves acquiring the replacement property before selling the relinquished property. Here are the general steps involved in a reverse 1031 exchange: Engage a Qualified Intermediary (QI): Just like in a regular 1031 exchange, it’s […]

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Navigating Delaware Statutory Trusts (DSTs) for Tax-Deferred Success

In the intricate world of tax-efficient wealth building, seasoned financial professionals and accredited investors in the commercial real estate arena understand the value of strategic tools. One such instrument gaining prominence is the Delaware Statutory Trust (DST) and its seamless integration with 1031 exchanges. This article delves into the relationship between DSTs and 1031 exchanges, […]

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What is “Like-Kind”?

In a 1031 Exchange, a taxpayer can defer the capital gains tax on the sale of certain property if the proceeds are reinvested in a “like-kind” property. For 1031 exchanges, the definition of like-kind is relatively broad. In the context of real estate, like-kind generally refers to the nature or character of the property rather […]

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What is Identification and what are the rules?

The identification rules refer to the guidelines that investors must adhere to when identifying replacement properties in a 1031 exchange. There are two key identification rules: Three-Property Rule: Under this rule, the exchanger can identify up to three potential replacement properties. Regardless of their fair market value, you can identify three properties as potential replacements. 200% […]

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What is an UPREIT (721 Exchange)?

An UPREIT, or Umbrella Partnership Real Estate Investment Trust, is a real estate investment structure that allows property owners to contribute their real estate assets to a partnership in exchange for operating units in a real estate investment trust (REIT) that owns the partnership. UPREITs are commonly used in the United States as a tax-efficient […]

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What is Boot?

“Boot” refers to any portion of a 1031 exchange that does not meet the like-kind replacement property criteria. Most commonly this is in the form of “cash boot” and “mortgage/debt boot.” Cash boot occurs when an investor has uninvested proceeds from the sale of a replacement property. If they intend to do a 1031 exchange but do […]

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