The U.S. Treasury adopted regulations in 1991 which govern Section 1031 “like-kind” Exchanges. Since then, many thousands of investors have utilized IRC 1031 exchanges to defer capital gain taxes on the sale of their business, investment or income property with the assistance of a professional Qualified Intermediary (“QI”).
Delaware Statutory Trust (DST) investments which still qualifies as “like-kind” property in a 1031 exchange. Based upon IRS Revenue Ruling 2004-86 (DSTs) these securitized investment structures give 1031 exchangers an option to go beyond single owner traditional real estate options as replacement properties
A 1031 exchange gives an option to the investor by reinvesting the proceeds from the sale of investment property into qualified replacement property to defer capital gains tax. The net result is that the exchanger can use 100% of the proceeds (equity) from their sale to buy another property and defer the capital gains tax.
In a TENANTS-IN-COMMON interest multiple owners come together to purchase a large, institutional-grade property, not as limited partners, but as individual owners. Each owner receives an individual deed at closing for his or her own undivided fractional interest in the entire property, and has all the same rights as a single owner.