IRS Approved Tax Mitigation Strategy

• Once you have completed the 1031 DST exchange,  there is typically a hold period of 24 months before you can complete a 721 exchange.  

• The 721 exchange involves transferring ownership interest in a DST for equal ownership in a publicly registered Umbrella Partnership Real Estate Investment Trust (UPREIT).

• A 721 exchange typically provides greater flexibility.  The Operating Partnership Units you will receive in an UPREIT are easier to liquidate than a share of a DST.

Own a share of a multi-billion dollar portfolio of Class A property on a tax deferred basis

• A 721 exchange allows you to defer taxes on your original property indefinitely.  You can collect passive income and appreciation until eventually passing your ownership interest to your heirs.

For specific information about our 1031 / 721 exchange, click here to schedule a call.

25% depreciation recapture, 20% federal tax, 5% state tax, 3.8% medicare tax. Not tax advice.

Hypothetical Sale

As with all investing, investing in private placements is speculative in nature and involves a degree of risk, including loss of your principal. Distributions, appreciation and liquidity are not guaranteed. Past performance is not necessarily indicative of future results and forward-looking statements and projections are not guaranteed to achieve the results described and your actual returns may vary significantly. Investments in private placements are illiquid in nature and there may be no secondary market or ability to sell the investment should the need for liquidity arise. Distributions from the Operating Partner are not guaranteed, neither is appreciation of the property held by the DST or UPREIT. A 721 exchange would be the final tax deferral strategy on your original property. You cannot intitate an additional 1031 exchange with the proceeds of the Operating Partnership. A DST does allow you to do an additional 1031 exchange once the DST has ended. You must be have completed the 721 exchange 12 months prior to taking a distribution. A distribution from the DST or UPREIT is a taxable event. The Trustee of the Delaware Statutory Trust is not able to renegotiate the terms of any existing loan and cannot borrow against the property once the offer is closed. The DST Trustee cannot reinvest the proceeds from the sale of the property. They are limited to making capital expenditures with respect to the property to those for (a) normal repair and maintenance, (b) minor non-structural capital improvements and (c) those required by law. Cash held in the DST between distribution dates can only be invested in short-term debt obligations. All cash, other than necessary reserves, must be distributed to the partners or beneficiaries and the Trustee cannot enter into new leases or renegotiate the current leases.

OUR MINIMUM TO PARTICIPATE IS $250,000 and you must be an accredited investor, as defined by the SEC. Before completing either a 1031 or 721 exchange, we encourage you to consult a tax advisor that is knowledgeable in both. Your Operating Partnership Units in the UPREIT will receive the same tax treatment as real property, which includes a step up in cost basis. Your heirs would then have right to sell the inherited units at the value based on your date of death and not your original cost basis. This website does not represent tax advice.