1031 Exchange & DST
1031 DST WHAT IS A DELAWARE STATUTORY TRUST (“DST”)?
A DST is a separate legal entity created as a trust under Delaware statutory law. The law permits a very flexible approach to the design and operations of a DST.
However, to use a DST in a Section 1031 syndication program, it must comply with the requirements of IRS Revenue Ruling 2004-86 and must also (if the
DST’s property is debt financed) meet lender requirements. To satisfy these requirements, each of our DSTs must:
- be a Special Purpose Entity (“SPE”);
- be bankruptcy remote; and
- be a very passive holder of real estate, with minimal trustee powers over the operation of the DST’s real estate, and no powers over the DST or its real estate at all in the hands of the DST’s beneficiaries.