Typical 1031 exchanges require the seller of commercial real estate to timely acquire another commercial real estate property in order to defer any tax liability on the sale, making this tax deferring device less attractive to owners wishing to eliminate the obligation of managing real estate or focusing their investment on one piece of commercial real estate. With the IRS approving the use of a Delaware Statutory Trust (DST) as replacement property for 1031 exchanges, owners can acquire institutional quality property, reduce management obligations, minimize liability, increase liquidity, and ease estate planning. A DST is professionally managed real estate trust with multiple owners. A 1031 exchange, particularly using a DST, remains complicated and experienced professional advice is necessary.

If you believe a Delaware Statutory Trust could assist you in deferring taxes when cashing in your commercial real estate, or just have questions, please contact me.

This Bulletin is designed to provide our friends and clients with information regarding the various subject matters covered, it is not designed to take place of legal, accounting, or other professional advice.  If expert assistance is required, the services of a competent professional should be sought. This memorandum may constitute advertising under the rules regulating Illinois attorneys.