1031 Exchange → DST
A 1031 exchange defers the gain on the sale of real estate by moving it into replacement property under a strict set of deadlines. We coordinate the qualified intermediary, the identification window and the closing timeline as one sequence.
Deferring gain without stepping out of real estate
A 1031 exchange lets an owner sell investment or business-use real estate and defer the capital gain by reinvesting the proceeds into replacement property, rather than paying tax on the sale in the current year. The strategy keeps capital working in real estate instead of handing a portion of it to tax on the way out. It requires strict adherence to IRS deadlines and qualified intermediary rules, so the mechanics matter as much as the decision to exchange in the first place. An exchange is one path for an owner already weighing a cost segregation study on the property being sold.
Two clocks that do not stop
Both run from the same closing date.
Proceeds from the sale have to move through a qualified intermediary and never pass through the seller's hands, or the exchange fails. We coordinate the QI relationship, the identification, and the closing timeline as one sequence rather than three separate events.
Where a DST fits
A regulated security, not for every exchange.
A Delaware Statutory Trust, or DST, is one form of replacement property. Instead of buying and managing another property directly, an owner can acquire a fractional interest in institutional-grade real estate held inside the trust, with no landlord responsibilities. DST interests are securities, available only to eligible accredited investors, and placed only through licensed representatives. Like any investment, they carry risk, including loss of principal, and are not appropriate for every owner or every exchange. Some owners weigh a DST against other regulated, securities-based energy strategies that carry similar eligibility and suitability requirements.
What has to be true for this to work
Modeled before the contract, not after.
An exchange needs to be modeled before the relinquished property is under contract, not after. That means knowing the likely gain, having a qualified intermediary lined up, and having a real short list of replacement options, DST or direct, ready to move on inside the 45-day window. Owners who wait until closing to think about replacement property are often the ones who end up rushed into a decision they would not have made with more time. See how an exchange was sequenced alongside other strategies in an actual engagement.
Deferral and deduction treatment depends on individual facts and current law, and should be reviewed with the tax and legal professionals responsible for your return.
Where this connects.
Start with the numbers
The first review is free. We will look at your current situation, identify the areas worth modeling, and tell you whether there appears to be a meaningful planning opportunity.