A 1031 exchange allows you to sell an investment property and reinvest the proceeds into another similar property, deferring capital gains tax.

• You can't directly receive the sale proceeds; they must be held by a third-party escrow account, known as a qualified intermediary.

• The exchanged properties must be considered like-kind by the IRS to defer capital gains taxes.

• There's no limit to how often you can use a 1031 exchange to build wealth tax-free.

A Delaware Statutory Trust (DST) is a legal entity under Delaware law, allowing owners to hold beneficial interests for federal tax purposes. According to IRS Revenue Ruling 2004-86, a DST can be used in 1031 exchanges, treating beneficial interests as direct interests in the replacement property.

Use a DST to build generational wealth by reinvesting and deferring taxes until you pass away.

• Federal Capital Gains Tax

• State Capital Gains Tax

• Depreciation Recapture Tax

• Net Investment Tax

Upon death, your heirs receive a step-up in cost basis, eliminating taxes.

Retirement/Exit Strategy for Landlords:

• Access to professionally managed, institutional real estate.

• Generate passive income.

• Build generational wealth.

• Heirs receive a step-up in cost basis, eliminating taxes.

Backup Option:

• Identify a DST within the 45-day window if a traditional 1031 exchange falls through.

• Save taxes if a deal falls apart near the end of the 45-day period.

Managing Leftover Equity

• Reinvest any leftover equity from a property sale that can't be replaced at equal or greater value into a DST to save taxes.

• Example: Sell a property for $1M, identify an $800K replacement property, and invest the remaining $200K in a DST to meet the 1031 rule. Maintain both passive and active investment roles.

Debt Replacement with DSTs

• DSTs come with non-recourse institutional financing, replacing your debt obligation in a 1031 exchange.

• Sell and complete a 1031 exchange without needing to qualify for a loan or take on a higher interest rate.