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How We Can Help You
We can assist you as needed in locating a Qualified Intermediary to receive and hold the proceeds of your real estate sale and to distribute these funds for the purchase of a new securitized property (or properties) as part of an exchange.
We can then help you assess the suitability of a variety of securitized exchange properties and help you understand the risks and opportunities within these real estate investments.

We can then assist you in making your ultimate real estate exchange decision, formally identifying the property (or properties) for exchange, and completing the necessary documentation to accomplish your desired transaction(s) under the applicable rules.
We will then be available to you throughout the lifetime of the exchange investment to represent you as needed.

How A Real Estate Exchange Is Done
"Like kind" means the properties are of the same nature or character, even if they differ in grade or quality. Real properties generally are of like kind, regardless of whether the properties are improved or unimproved. However, a real property within the United States and a real property outside the United States would not be like kind properties. Generally, "like kind" in terms of real estate, means any property that is classified real estate in the United States, and in some cases, the U.S. Virgin Islands.
Taxpayers who hold real estate as inventory, or who purchase real estate for re-sale, are considered "dealers". These properties are not eligible for Section 1031 treatment. However, if a taxpayer is a dealer and also an investor, he or she can use Section 1031 on qualifying properties. Personal use property will not qualify for Section 1031.
The primary purpose of doing a delayed exchange is to defer capital gains taxes and the recapture of any depreciation on the property sold. To make sure that this goal is properly achieved, it is vital that the exchanger comply with all rules required by the Internal Revenue Service.
Section 1031 of the Internal Revenue Code defines these rules, and the Like-Kind Exchange Regulations, issued by the US Department of the Treasury, interprets the IRS rules.
The three primary rules to follow for determining taxation on an exchange are:
- The total purchase price of the replacement "like kind" property must be equal to, or greater than, the total net sales price of the relinquished, real estate property.
- All of the equity received from the sale of the relinquished real estate property, must be used to acquire the replacement "like kind" property.
- Replacement property must be subject to an equal or greater level of debt than the property sold.
The extent that either of these rules are violated determines the tax liability after executing the exchange. Partial exchanges qualify for a partial tax-deferral treatment. The amount of the difference is considered "boot' and is taxable. The proceeds from the sale of a property to be exchanged must be deposited directly from escrow with a Qualified Intermediary.
To qualify for tax deferred treatment the exchange must comply with the following timelines:
Identification Period: The exchanger must identify with the Qualified Intermediary one or more replacement properties to purchase with the proceeds of the sale within 45 days from the sale of the relinquished property. This 45-day timeline must be followed under any and all circumstances and is not extendable in any way, even if the 45th day falls on a Saturday, Sunday or a legal US holiday.
Exchange Period: The exchanger must complete the purchase of property from the proceeds of the sale within 180 days of the date of the original sale or by the due date for the exchanger's tax return for that taxable year in which the transfer of the relinquished property has occurred, whichever occurs earlier. This timeline also is not extendable under any circumstances, even if the 180th day falls on a Saturday, Sunday or legal (US) holiday.
There are other rules and rules within rules that must be followed. We can help you do that.
DST Investments
DST investment allows investors to pool their funds together to purchase institutional-quality properties. If properly structured, DST investors are not in partnership with the other investors. They are simply co-owners in a common property managed by the investment sponsor firm.
In 2004, the IRS released Revenue Ruling 2004-86(https://www.irs.gov/irb/2004-33_IRB#RR-2004-86), which allows the use of a DST to acquire real estate where the beneficial interests in the trust will be treated as direct interests in a replacement property for the purposes of a § 1031 exchange.

DST investments may simplify property owners' lives through the elimination of time-consuming and costly management problems. DST owners receive all of the benefits of traditional real estate ownership (100% pass through of their pro rata share of distributable cash flow, deductible expenses, depreciation, and all appreciation upon future sale).
A DST is structured so that each beneficiary (investor) owns a beneficial interest in the trust. The managing Trustee of the DST is either the Sponsor or an affiliate of the Sponsor. The DST holds title to 100% of the interest in the property. Tax reporting for a DST is done on a Schedule E utilizing property operating information provided by the Sponsor. The IRS issued Revenue Ruling 2004-86 (https://www.irs.gov/irb/2004-33_IRB#RR-2004-86) that set forth parameters a DST must meet in order to be viewed as a grantor trust and qualify for a viable tax deferring vehicle:
THE DST MAY NOT RENEGOTIATE THE LOAN TERMS AND/OR THE LOAN MAY NOT BE REFINANCED.
The Sponsor has negotiated the loan terms for the property prior to acquiring the property. In the event the property is not sold before the loan matures, there are provisions in place to convert the DST to a limited liability company (LLC). This allows the Trustee (Sponsor) the ability to take the necessary actions to remedy the situation if, for example, the property needed major capital improvements(not allowed within the DST structure) or the loan needed to be refinanced. This action limits investors' ability to conduct another 1031 exchange upon the sale of the property.
THE DST MAY NOT RENEGOTIATE LEASES OR ENTER INTO NEW LEASES.
The investors, through the Trust Agreement, enter into a Master Lease with the Trustee in order to avoid having to renegotiate leases or enter into new leases with the actual tenants.
THE DST MAY NOT MAKE MAJOR STRUCTURAL CHANGES.
Any major improvements will be done or have been done by the seller prior to the Sponsor purchasing the property. Normal "turnover" expenses fall within the DST guidelines and do not create an issue with the DST structure.
THE DST MUST DISTRIBUTE ALL CASH, OTHER THAN THE NECESSARY RESERVES, TO THE BENEFICIARIES.
THE DST MAY NOT SELL OR EXCHANGE PROPERTY AND REINVEST THE PROCEEDS.
The DST structure allows the investors or beneficial owners to conduct their own 1031 tax deferred exchange once the DST has sold the asset.
THE DST MAY NOT PURCHASE ADDITIONAL ASSETS OTHER THAN SHORT-TERM OBLIGATIONS.
All cash from the property is held in liquid money market type accounts.
THE DST MAY NOT ACCEPT ADDITIONAL CONTRIBUTIONS OF ASSETS.
There can be no additional capital calls to the DST. As part of the due diligence, the Sponsor conservatively anticipates the amount needed to properly maintain the property over the holding period and those reserves are included in the initial capital raise.