Delaware Statutory Trust Library
How DSTs work as replacement property, what they cost, how sponsors are vetted, what happens at sale, and how they compare with the alternatives.
A Delaware Statutory Trust lets an exchanger buy a fractional interest in institutional property inside the 45-day and 180-day windows, with no management. That simplicity hides real decisions: which sponsor, what fees, how much debt, what happens at sale, and whether a zero cash flow or direct title structure fits better.
This library explains each piece plainly, with the revenue ruling, the typical offering terms and the trade-offs on the table.
DST lifecycle and exits
721 UPREIT Roll-Ups from a DST: Mechanics, Benefits and Trade-Offs
A 721 roll-up swaps your DST interest for OP units with no gain under §721(a), carryover basis under §722 and a permanent end to 1031s. Who it suits.
ReadAfter a 721 UPREIT, Is It No More 1031 for Good, or Can You Ever Exchange Again?
Generally no: OP units are partnership interests and REIT shares are stock, both outside §1031, so deferral ends at redemption or a §1014 step-up at death.
ReadCan You 1031 Into a REIT? Understanding the Path via a DST-to-721 UPREIT
No: REIT shares are stock, not real property, so a direct 1031 fails. Route: 1031 into a DST, then a §721 swap for OP units after a two-to-three-year hold.
ReadWhat Happens When a DST Sells: Your Next 1031 From the Sale Proceeds
When a DST sells, your 45- and 180-day clocks start at closing and a QI must hold your share; otherwise gain, 25% recapture and 3.8% NIIT fall due.
ReadDST basics
Accredited Investor Rules for DST 1031 Investments: Tests, Proof and Exceptions
To buy a DST you must meet Rule 501(a): $1 million net worth excluding your home, $200,000/$300,000 income, or a Series 7, 65 or 82; most sponsors verify it.
ReadCan You Invest in a DST Without Doing a 1031 Exchange?
Yes. DSTs are Rule 506 private placements open to any accredited investor; cash buyers get a fresh cost basis and new depreciation, often from $25,000.
ReadDST Asset Classes: Making the Right Choices Inside a 1031 Exchange
Choose DST sectors by which risks a trust that cannot re-lease, refinance or renovate can absorb: net lease rests on one tenant, apartments on a master tenant.
ReadDST Diversification Levels: How Much Diversification Do You Really Get?
One DST is one sponsor, one loan and a fixed set of properties; real diversification means splitting equity across 3–6 trusts at $50,000–$100,000 minimums.
ReadDST Like-Kind Qualification: Do Delaware Statutory Trust Interests Qualify in a 1031?
A DST interest is like-kind only because Rev. Rul. 2004-86 treats a grantor-trust owner as owning the real estate; seven trustee limits keep it that way.
ReadDST Minimums and Sizing: How to Split One Exchange Across Multiple Trusts
Most DSTs take $50,000–$100,000 per exchanger and $25,000 from cash buyers; $150,000 fits one or two trusts, $500,000 three or four, and leftover cash is boot.
ReadDST Reporting and Transparency Expectations: What Investors Get After Closing
No rule forces a DST sponsor to send periodic reports; the PPM is the floor, Delaware law adds a demand right, and tax forms can arrive as late as April 15.
ReadWhat Exactly Do I Own When I Invest in a DST?
You own a percentage beneficial interest in a Delaware statutory trust: personal property under 12 Del. C. §3805, yet a slice of real estate for federal tax.
ReadDST fees and conflicts
Advisor Fees and Conflicts When You're Sold a DST
The offering pays your broker's commission from your equity; FINRA Rule 2310 presumes more than 10% unfair, and Reg BI and Form CRS must disclose it in writing.
ReadDST Fees and Loads: How Much of Your 1031 Money Reaches the Real Estate?
Form D filings put DST selling commissions at 5.00% to 9.25% of equity and sponsor payments at up to 16.86% more; here is what a $500,000 exchange really buys.
ReadDue-Diligence Checklist: Questions to Ask Before You Invest in Any DST Offering
Twenty-seven written questions on property, loan, sponsor, fees and exit, plus the FINRA 10-22 and 23-08 investigation your broker-dealer must have done.
ReadHow to Evaluate and Compare DST Sponsors Before You Invest
Judge a DST sponsor on its full-cycle list, the guarantor's balance sheet, Form D history, BrokerCheck and Rule 506(d) checks, plus twelve diligence questions.
ReadReading a DST PPM and Form D: Where the Fees, Conflicts and Risks Hide
Five PPM sections and Form D Items 12 to 16 expose a DST's full cost: use of proceeds, sponsor pay, conflicts, the master lease and EDGAR commission figures.
ReadDST structure and risks
Can DSTs Do Value-Add or Development, or Only Stabilized Properties?
No: Rev. Rul. 2004-86 limits a DST to minor non-structural work and bars new capital, loans and leases, so value-add needs a TIC, improvement exchange or fund.
ReadCan You Pledge a DST Interest as Collateral or Borrow Against It?
Legally pledgeable personal property, but trust and loan documents restrict transfers, no market prices it, and Regulation T gives it zero margin value.
ReadDST Illiquidity and Exits: How Hard Is It to Get Out Early?
DST interests are restricted securities with no market; early exits mean a discounted private sale, a sponsor 721 option after year two, or waiting it out.
ReadDST Master Leases: How They Work and What Risks They Add
In a master-lease DST your income is one tenant's rent, usually a sponsor affiliate's; base rent, the spread and the guaranty decide what you actually receive.
ReadDSTs, 1031s and Tax Law Change Risk: How Much Should You Worry?
Section 1031 was narrowed in 1984, 1989 and 2017 and capped only in unenacted budgets; the 2025 tax act left it intact. How a change would land on a DST.
ReadEnvironmental, Insurance and Climate Risk in DST Investments
A DST cannot take new capital after closing, so the Phase I, the insurance program and the reserve are the only backstop for flood, wind, fire and quake losses.
ReadHow to Analyze Portfolio DSTs That Mix Asset Classes and States
Break a portfolio DST into property-level NOI, tenant and state shares: each building counts on your 45-day identification list and can add a state return.
ReadKey Risks of DST 1031 Investments: An Overview to Judge If They're Right for You
Rev. Rul. 2004-86 fixes a DST's risks: no refinancing, no new leases, no new capital, plus 7–15% loads and no resale market. How to weigh each before you sign.
ReadSingle-Tenant vs Portfolio DSTs: Understanding Tenant Concentration Risk
A single-tenant DST cannot sign a new lease unless the tenant is bankrupt or insolvent, so one vacancy can stop its income; portfolio DSTs dilute that risk.
ReadWhat If a DST Sponsor or Master Tenant Files for Bankruptcy?
A sponsor's bankruptcy cannot reach the trust's building; a master tenant's filing lets the trustee re-lease under Rev. Rul. 2004-86; the lender is paid first.
ReadDST income and returns
Comparing DST Cash Yield vs Direct NNN Cap Rates After Fees and Leverage
A cap rate is NOI over price before debt and fees; a DST yield is cash after debt service, fees and reserves over equity that includes the load.
ReadDST Cash Yield vs Total Return: Understanding the Numbers in Marketing Decks
Cash yield is one year's payout over your investment; IRR adds the sale. One deal can show a 5% yield with a 7% IRR, or 3.7% if the load never comes back.
ReadDST Distributions: Timing, Frequency and the Reliability of the Income
Most DSTs pay monthly at a projected 4% to 7% that is not guaranteed; lender and reserves come first, so tenant trouble or a loan maturity cuts your check.
ReadDST taxes and reporting
Depreciation and Bonus Depreciation in DST 1031 Investments
In a DST your carried-over basis keeps the old schedule; 100% bonus depreciation applies only to new money in 5-, 7- and 15-year components, never the building.
ReadDST Passive Losses: What They Can Offset and What Happens on Sale
DST losses are passive under §469: they offset rental and passive K-1 income, never wages, and stay suspended until a fully taxable sale of your whole interest.
ReadDST Tax Forms and Reporting: How DST Income Is Taxed and Reported Each Year
DST investors get a grantor statement, not a K-1: your share of rent, interest, expenses and depreciation goes on Schedule E, due by the trust's return date.
ReadDST Tax Return Reporting: How to Report Your 1031 DST Investments
Form 8824 goes with the sale-year return; each DST is then its own Schedule E rental from the sponsor's grantor letter, basis kept on the old schedule.
ReadDSTs and 1031 Exchanges for Foreign Investors: FIRPTA and Other Tax Issues
A foreign seller can 1031 into a DST, but FIRPTA takes 15% of the gross price at closing unless Form 8288-B is filed by closing day; the IRS has 90 days.
ReadState Tax and Multi-State Filing Issues for DST Investors
A DST is a grantor trust, so every income-tax state where it owns property expects a nonresident return each year and at sale; eight states impose none.
ReadDST leverage and debt
DST Leverage and Interest-Rate Risk: What Investors Need to Understand
DST loans are fixed and cannot be refinanced, so rate risk hits at maturity: a one-point cap-rate rise cuts equity 23% in an all-cash trust and 46% at 50% debt.
ReadZero-Cashflow DSTs Explained: Structure, Uses and Risks in 1031 Exchanges
A zero-cash-flow DST sends all rent to its lender, so a small equity slice carries a big loan for debt replacement; the price is phantom income and tenant risk.
ReadDST vs other structures
DST vs Direct NNN Property as 1031 Replacement
One NNN building gives you the whole cap rate, the whole vacancy and the loan; a DST pays a net yield after 7–15% loads with no loan to sign. The $2M math.
ReadDST vs Paying the Capital Gains Tax: When Is the 1031 DST Route Worth It?
For 2026 the bill is 15-20% federal, 25% recapture, 3.8% NIIT and up to 13.3% state; a DST wins when that clearly exceeds its 10-18% load and you can wait.
ReadDST vs REIT vs Private Syndication: Which Structure When 1031 Isn't Everything?
Only a DST interest is real property under Reg. §1.1031(a)-3, so only a DST takes 1031 money in and out; REITs and LPs trade deferral for liquidity or upside.
ReadDST vs TIC: Choosing the Right Co-Ownership Structure for Your 1031 Exchange
A TIC gives up to 35 co-owners a vote and a place on title; a DST gives one trustee control and one loan. Rev. Proc. 2002-22 and Gluck draw the lines.
ReadDST estate planning
If You Inherit a DST, Can You 1031 Exchange Out of It Later?
Yes: heirs own the trust's real estate for tax purposes and can exchange when it sells, but §1014 usually resets basis so the taxable gain is small.
ReadTransferring DST Interests to Heirs and Trusts: Process and Paperwork
A DST interest is personal property under 12 Del. C. §3805 and transfers on the trust agreement's terms: death certificate, letters, W-9 and the sponsor's form.
ReadUsing DSTs in Estate Planning and How Step-Up in Basis Works for Heirs
A DST interest is real estate, so at death §1014 resets heirs' basis to fair market value, wiping deferred gain and recapture; Form 706 is due in 9 months.
ReadHave a sale in motion?
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