DST vs 1031

What You Need to Know

What is a Deferred Sales Trust (DST)?

• A tax-deferment strategy for selling an investment property.
• Utilizes a trust structure to defer capital gains taxes.
• Investors receive a guaranteed income stream and potential growth opportunities.

What is a 1031 Exchange?

• A tax-deferment strategy for selling an investment property.
• Investors must identify and purchase a new property within 180 days.
• No guaranteed income streams or growth opportunities.

Pros & Cons of Deferred Sales Trust

• Pros: Tax deferment, guaranteed income, growth potential.
• Cons: Complex structure, fees, and limitations.

Pros & Cons of 1031 Exchange

• Pros: Simplicity, no fees.
• Cons: Time constraints, and limited growth opportunities.

Time Limits for DST & 1031

• Deferred Sales Trust: No time limit for reinvestment.
• 1031 Exchange: Must identify and purchase new property within 180 days.

Uses of DST & 1031

• Deferred Sales Trust: Can purchase real estate, stocks, businesses, etc.
• 1031 Exchange: Must be used to purchase another investment property.

Conclusion

The Deferred Sales Trust and 1031 Exchange both offer tax-deferment strategies for selling investment properties. However, the DST offers more flexibility and potential for growth through a guaranteed income stream and a wider range of investment options. On the other hand, the 1031 Exchange is a simpler option but with limited growth potential and time constraints for reinvestment. Ultimately, the choice between the two will depend on individual investment goals and priorities. Contact us today, at Wealth Financial Services & Products at 754-202-2300 or visit our Get a Quote, to set up a consultation.