DSTs offer several estate planning advantages that traditional real estate cannot. Upon your passing, your heirs receive a step-up in cost basis, eliminating capital gains tax liability on appreciated property. Because DSTs are professionally managed, your beneficiaries avoid the headaches of active property management. In addition, unlike a single physical property that heirs must jointly manage or decide to sell, DSTs allow each heir to receive their own fractional interest—giving them the freedom to hold or sell their share independently, reducing conflict and eliminating forced decisions.
The DST is the single owner and agile decision maker on behalf of investors. Enjoy truly passive income—no tenants to manage, no maintenance calls, and no day-to-day property oversight.
Most real estate investors can’t afford to own multi-million dollar properties. DSTs allow investors to acquire partial ownership in properties that otherwise would be out-of-reach such as Class A apartments, medical offices, self-storage facilities and industrial properties.
Your investment is held in a trust, protecting you from personal liability related to property debt or legal claims. The DST is the sole borrower and loans are nonrecourse to the investor.
DSTs allow for much lower minimum investments—typically around $100,000. You can also invest new cash at the same minimum, giving you access to larger, institutional-quality deals without needing to commit millions.
Investors can divide their investment among multiple DSTs, allowing you to spread your risk across multiple properties, asset classes, and geographic locations—something hard to achieve with a single property exchange.
If for some reason the investor can’t acquire the original property they identified, a secondary DST option allows them to meet the exchange deadlines and defer the capital gains tax.
Any remaining profit on the sale of your relinquished property is considered “boot.” This remaining money becomes taxable unless you eliminate it. The excess cash (boot) can be invested in a DST to avoid incurring tax.
The DST structure allows the investor to continue to exchange real properties over and over again until the investor’s death resulting in a stepped up cost basis to their heirs eliminating capital gains altogether.
