WHAT IS A DELAWARE STATUTORY TRUST?
With Revenue Ruling 2004-86, the IRS approved an interest in a Delaware Statutory Trust (DST) as a “like kind” property in a #1031 exchange. Over the years, DSTs have become the replacement vehicle of choice in such exchanges.
A DST is a separate legal entity created under the laws of the state of Delaware. The independent trustee of the DST holds the legal title to the real estate properties inside the trust. Investors own a fractional interest of the trust proportionate to their investment amount.
Key Benefits of DSTs in 1031 Exchanges
YOU KNOW WHAT YOU ARE GETTING
STEADY CASH FLOW
DSTs are set up to target a steady monthly income stream. They also allow for the continued use of depreciation to shelter some of the income received.
Potential Risks of Using DSTs
All investments have inherent risks including those that are common to real estate investments.
Specific risks include but are not limited to:
• Lack of liquidity-there is currently no secondary market,
• Property appreciation is not guaranteed,
• The potential for loss of principal invested,
• Other risks are disclosed in detail within the Private Placement Memorandum that must be reviewed before investing.
To discuss the use of DST’s in exchanges call Dieter Thurow at 707-431-8898 or send a confidential email to firstname.lastname@example.org