What is a “DST”?

In accordance with the Internal Revenue Service’s Revenue Ruling 2004-86, a beneficial interest in a Delaware statutory trust, or “DST,” that holds a replacement property may be considered “like-kind” replacement property in a Section 1031 exchange. A DST may own one or more properties.

The rights and obligations of investors in a DST will be governed by the DST’s trust agreement. Typically, investors have limited voting rights over the operation and ownership of any properties owned by the DST. In addition, the trustees of the DST may be entitled to certain fees and reimbursements, as set forth in the applicable trust agreement.

DST 1031 properties are only available to accredited investors (generally described as having a net worth of over $1 million dollars exclusive of primary residence) and accredited entities only. If you are unsure if you are an accredited investor and/or an accredited entity please verify with your CPA and Attorney.