- There are a few different paths an An individual, married couple or any other entity such as a corporation, limited liability company, partnership or trust. An investor has property and would like to exchange it for new property. can go down. They first need to decide if they want to be a passive owner or an active owner. If they want to be an active owner, they can look for property locally or nationally and buy that property and continue being an active landlord. If you are looking to become a more passive owner of RE while still completing a 1031 Like-Kind Exchange there are two fractional ownership structures that the IRS has approved. Tennant-in-Common (TICs) and Delaware Statutory Trusts (DSTs) are two passive, fractional ownership structures that the IRS has approved for 1031 exchanges. Please call our firm to hear more.
- A Delaware Statutory Trust (DST) is a type of ownership structure that is under Delaware law. When a DST is properly structured, it will be deemed a grantor trust for federal income tax purposes and the purchaser of the fractional ownership interest in the trust will acquire an undivided share of the asset(s) held by the DST. If all the rules are followed, DSTs are approved to use in a 1031 Like-Kind Exchange.
- A DST may offer potential benefits that maybe similar to owning physical property when conducting a 1031 Like-Kind Exchange. As always, it’s always best to reach out to our firm to explain your personal situation to see if a DST is right for you. Some of the potential benefits are potential for monthly income, step up in basis at death, diversification of properties (property types and geography), institutional quality property, and hands-off management to name a few. As in any investment there are risks and the need to be an Accredited Investor (SEC Accredited Investor Definition) so please reach out to our firm to learn more and see if a DST could be a fit.
- Yes, as in any investment there are risks associated with it. First off, you need to be an Accredited Investor (SEC Accredited Investor Definition) because of the complex structure of DSTs. These are usually Reg D, illiquid, long term investments. Like any investment there is possibility of the investment losing money, income stream to stop or decrease, etc. As always, reach out to our firm to see if a DST is the right fit for you. Investors should review all risks before making an investment.
- Yes, investment minimums vary for each offering, but typically they are $100,000 for 1031 investors and $25,000 for cash non-1031 investors. Minimum investment amounts are clearly disclosed on our Marketplace and the respective Offering Materials. Investment minimums are set by the offering The party offering a commercial property asset available for sale to investors. The sponsor purchases the property, arranges the financing (if any), sells the fractionalized interests to individual investors, and typically handles accounting and property management after closing.. Please contact our firm if you have specific questions on minimum investment amounts.
- Maximum investments vary depending on the size of the investment and are the discretion of the offering The party offering a commercial property asset available for sale to investors. The sponsor purchases the property, arranges the financing (if any), sells the fractionalized interests to individual investors, and typically handles accounting and property management after closing..
- For investors with more than $1 million to invest, our firm offers customized 1031 options. Please contact us at (781) 235 – 4417 to discuss your needs.
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The Investor’s Guidebook
A 1031 exchange is a big commitment, but it doesn’t have to be difficult. The key is planning, and that’s why we’ve created an investor’s guide to 1031 exchange investing. It tackles the art and science of completing your exchange, and the pitfalls to avoid.
What is a 1031 Exchange? features helpful charts, diagrams, timelines and concepts with non-technical language.
- What is a 1031 exchange?
- The pros and cons of a 1031 exchange.
- How do you qualify?
- Detailed descriptions of a 1031 exchange process.
- How to defer your taxes.