Insights

In 2017, the new federal tax law created Opportunity Zones with the goal of directing investment, development, and improvement in distressed communities around the United States. An Opportunity Zone is defined by the IRS as an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. As you may expect, Opportunity Zones are now, rightfully, getting a lot of attention.

In previous posts I have written about the merits of the Delaware Statutory Trust (DST) and how this popular securitized investment vehicle may help individuals complete their property exchanges and ultimately, achieve their financial goals. I have also addressed the risks associated with investing in real estate and the unique risks related to DSTs.

In this article, I highlight the fees involved when investing in DSTs, with the intent of bringing context to the DST fee structures so that investors are better informed.

Recently, the White House released the details of President Biden’s proposed $1.8 trillion American Families Plan. The President’s proposal outlines several tax increases intended to help finance parts of this monumental spending—including changes to 1031 exchanges that, if passed, will severely limit the ability of everyday Americans to complete an exchange.

An alternative investment is an investment that does not fall into the traditional asset class of stocks, bonds, and cash. The most common types of alternative investments are precious metals, oil and gas, venture capital, hedge funds, and real estate. An investment made into a DST to complete a 1031 exchange, for example would be considered an alternative investment.

We at Chicagoland 1031 Exchange often talk about the potential benefits of using a Delaware Statutory Trust (DST) as replacement property to complete 1031 exchanges. It’s true that DSTs have become a popular vehicle for 1031 exchange investors, with good reason. But it’s prudent for us to recognize that, although DST investments have a lot of positive features and are often an appropriate investment channel, they may not be a good fit for every investor.

The Delaware Statutory Trust, or DST, is a popular investment choice for real estate investors interested in deferring capital gains taxes on appreciated property by using a 1031 exchange. We created the eBook — Bringing Clarity to Your 1031 Exchange — to help potential investors better understand the benefits and risks associated with DSTs.

Two of the more popular investment options available to 1031 exchangers are the triple net (NNN) lease and the Delaware Statutory Trust (DST). At Chicagoland 1031 Exchange, we’re often asked how the two investment approaches compare. To help answer that question we thought a post highlighting some of the similarities and differences would be beneficial.

This is the first part of a series on COVID-19.

The COVID–19 pandemic will long be remembered as an event that has forever changed many of the ways we live, socialize, work, and play. The novel coronavirus plays no favorites and is almost boundless in its ability to affect every part of our economy.

Good friends and clients have asked me about how I think the real estate industry will be impacted, first at a macro-level and then more specifically for the 1031 exchange industry and Delaware Statutory Trust investors.