I recently went to a seminar on Deleware Statuatory Trusts.
This is a great alternative to the standard 1031 transaction where you have 45 days to identify the property and 180 days to close.
With a Deleware Statuatory Trust (DST) not to be confused with my other blog about Deferred Sales Trust (DST), you can purchase fractional shares of real estate and take advantage of defferring capital gains.
Section 1031 of the Internal Revenue Code Provides an effective strategy for deferring the capital gains tax that may arise from your business/investment property sale. By exchanging the property for like-kind real estate, property owners may defer their tax and use all of the proceeds for the purchase of replacement property. Like-Kind real estate includes business/investment property, but not the property owner's primary residence. Section 1031 does not apply to the exchange of stocks or bonds.
The reasons to partipate in a 1031 exchange are numerous. There are specific timelines and procedures that must be allowed to take advantage of the benefits of this program.
A Deleware Statutory Trust (DST) is a business trust created under the Deleware law. A DST can be used in a wide variety of business settings. However, to use a DST in a Section 1031 syndication program, it must comply with the requirements of IRS Revenue Ruling 2004-86 and must also meet lender requirements.
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