Why Use the Deferred Sales Trust instead of a 1031 exchange?

There are several reasons to consider the Deferred Sales Trust over a 1031 exchange:

1. Flexibility: The DST allows you to sell high and buy low without the pressure of 1031 exchange deadlines. You can reinvest in real estate and back out at any time unlike the rigid timing constraints of a 1031 exchange.

2. Business Opportunities: Up to 80% of the cash in the DST can be invested in partnership with you via an LLC for various business purposes, all while deferring capital gains tax.

3. Rescue Failed Exchanges: The DST can save a failed 1031 exchange by accepting funds after the 45-day or 180-day deadlines, providing peace of mind in case the exchange does not go as planned.

4. Retire from Real Estate Management: Eliminate the headaches of property ownership and truly retire from real estate management.

5. Liquidity and Diversification: Diversify your capital across multiple markets and asset classes, including stocks, bonds, REITs, cryptocurrency and more, beyond the limitations of a 1031 exchange.

6. Convert Illiquid Assets: Convert illiquid assets into a diversified portfolio of liquid investments to reduce risk and volatility.

7. Depreciation Schedule Reset: The depreciation schedule resets when property is purchased in partnership with a DST, unlike in a 1031 exchange where it travels.

8. Individual Ownership: Each individual owner can have their own DST, allowing for individualized management based on risk tolerance and preferences, unlike the joint ownership typically required in a 1031 exchange.

9. Net Rental Income: Rental income can be reinvested in the DST, potentially lowering your tax bracket and earning interest on income that would otherwise be paid to the IRS.

10. Estate Planning Benefits: Move funds outside the taxable estate to avoid estate tax, providing potential tax savings for your heirs.