Many people have questions about 1031 exchanges involving DST syndications. In this article, we’re going to discuss a few things you should know about 1031 exchanges and DST syndications.
How Many Properties?
One of the critical things to ask regarding the identification of your DST is: “is this a single asset DST comprised of only one parcel, or is it a multiple asset DST comprised of numerous properties?” If it has multiple non contiguous parcels in it, remember that may violate the 1031 exchange three property rule. If that’s the case you may need to make your property identification under a different rule, such as the 200% rule.
Qualified Property
It’s always a good idea to ask your DST sponsor if what you are buying is qualified, like-kind property. Is it real estate or is it something else? For example, partnership interests are specifically excluded from 1031 exchange. Certain trusts or REITs may be excluded as well. There are authorities for properly setting up a TIC (tenancy in common) syndication but you need to be careful that those TIC syndications aren’t de facto partnerships. The same thing goes for DSTs. There are 7 deadly sins for properly setting up a DST and you want to make sure that your sponsor is adhering to those rules and setting up the DST correctly so that it’s considered an interest in real estate.
CPEC1031, LLC
If you are searching for a 1031 exchange company to assist you with your next like-kind exchange, you’ve come to the right place! CPEC1031, LLC has over two decades of experience facilitating real property exchanges across the United States. Our qualified intermediaries have the knowledge and expertise required to ensure you are able to defer 100% of your gains. Reach out to us today at our downtown Minneapolis office to learn more about our services and see how we can help you with your next transaction!
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
© 2023 Copyright Jeffrey R. Peterson All Rights Reserved