HOW IT WORKS

One plan.
Distinct transactions.

The DST pathway starts with an exchange into qualifying real estate exposure. A later 721 transaction is a separate step—not an automatic outcome.

1. Plan before the sale

   Bring your advisor, tax professional, and qualified intermediary into the discussion. Confirm the property’s eligibility, your financial needs, and your exchange structure before proceeds are received.

2. Complete the 1031 exchange

   Identify replacement property within 45 days. Generally, completion must occur by the earlier of 180 days or the tax-return due date, including extensions, for the sale year. Have your qualified intermediary confirm the applicable dates and any special relief.

3. Own the DST interest

   A properly structured DST can qualify under the conditions discussed in IRS Revenue Ruling 2004-86. Review the property, financing, sponsor, expenses, and limits on trustee powers. A DST is not automatically eligible simply because it uses that name.

4. Evaluate any later contribution

   The offering and governing documents control conversion rights, timing, conditions, and valuation. An anticipated two-year period is not a universal statutory requirement or an automatic safe harbor. Confirm whether you can decline the transaction.

5. Understand the partnership stage

   Review the operating partnership agreement, any tax-protection agreement, and redemption provisions. The value of the investment and its distributions can change. Future liquidity and tax treatment must be evaluated independently.