Give A Solid Foundation To Your Investment By 1031 DST Property

by Angilina Taylor 1031 Exchange Expert, Tax Consultant

If the investor wants to reinvest the proceeds and wants to search for the best 1031 option, you can get connected with 1031xchange.com. 1031 DST Property is not a new concept, but the current tax law has made this type of investment an increasingly popular option that can be worth looking for the 1031 exchange investors.

1031 DST Property is an entity set up for business purposes. DST took birth from Delaware Statutory Trust Act, 1988, and recognized by Delaware state law. It is formed as a private governing body under which the property is administered, held, managed, and invested. DSTs are the trust created by combining many investment properties. They allow the investor to buy the shares of the trust according to his capacity. The properties that are connected can be situated in different parts of the USA.

The reason for which the investor over real estate investments mostly prefers DSTs is that DSTs allows the user to have a regular flow of income even for small investments. DSTs have created a boom in the investment industry as DSTs lead by leaving their heirs with assets, not with the liabilities. It is essential to involve the 1031 exchange advisor for the 1031 exchange process.

Benefits of choosing DST’s:

1. If the investor doesn’t want to invest the entire proceeds in a single property, then under DSTs, the investor can split his investment among multiple DST properties. DST allows the investor to diversify his real estate portfolio.

2. If the investor plans for the income-generating investments for his heirs long after when he not there, at this time, DSTs can be the worthy investment to go with. Therefore DSTs create a valuable inheritance for their heirs.

3. 1031 DST Property can be used as one of the three candidate properties during the identification period of the 1031 exchange. Suppose if the investor doesn’t acquire the first two choices of identified candidate property to meet the deadline, at that time, DST property remains as an option that can be closed very quickly to meet the exchange deadline. Therefore we can say DSTs also work as the backup plan for the investor or the taxpayer.

4. The taxpayers can diversify their investment properties if they don’t want to invest the entire amount in a single property, then the investors can split the investment among multiple DST properties; therefore, we can say DSTs also provide the opportunity to diversify the real estate portfolio for the investors.

1031 Exchange in California

The 1031 exchange rules in California say that anyone who starts an exchange for a fee maintains an office in the state for facilitating exchanges is legally required to follow the California specific rules.Any Qualified Intermediary working in California must always maintain a bond equivalent to $1 million, deposit an amount of securities or cash, or irrevocable letters of credit in an amount not less than $1 million. Anyone who acquires a loss as a result of a facilitator's violation of the California 1031 exchange rules has the power to claim the bond, account, or trust.