A Delaware Statutory Trust (DST) is a type of real estate investment trust (REIT) that holds a single commercial property or a portfolio of commercial properties. The trust is structured as a legal entity under Delaware state law. It allows multiple investors to pool their resources and purchase a fractional ownership interest in a commercial real estate property. The investors receive a share of the property’s income and can defer paying taxes on the income until they sell their interest in the DST.
- A Delaware Statutory Trust (DST) is a type of real estate investment trust (REIT) that holds commercial properties
- .The DST allows multiple investors to pool their resources and purchase a fractional ownership interest in a commercial real estate property.
- Depreciation deductions can significantly impact a taxpayer’s taxable income, especially in the case of a 1031 exchange.
An investor invests $100,000 into a DST that holds a shopping center. The shopping center generates $10,000 in annual income, and the investor receives a pro-rata share of the income based on their investment. The investor can defer paying taxes on the income until they sell their interest in the DST.
- Consider the risks and rewards of investing in a DST, and make sure that the investment aligns with your investment goals and risk tolerance.
- Carefully review the offering documents for the DST, including the financial statements and the operating agreement, to understand the terms of the investment and the potential risks.
- Consider working with a financial advisor to evaluate the suitability of a DST investment for your portfolio.
- Do your research and consider the performance and management of the properties held by the DST.
- Make sure you understand the fees and expenses associated with the DST, including management fees, property management fees, and other expenses.
- Consider the liquidity and marketability of your investment in the DST, as the market for
DST interests can be illiquid, and it may be difficult to sell your interest in the DST.
