What Is DST?
A Delaware Statutory Trust is a legal structure that lets multiple investors each own a fractional, passive interest in a larger property, while still qualifying as "like-kind" real estate for a 1031 exchange.
Why it matters
DSTs are popular with investors doing a 1031 exchange who want to exit active property management without losing their tax deferral, though they're illiquid and give investors no operational control.
1031 Exchange vs. DST vs. Qualified Opportunity Fund
Defers capital gains tax by reinvesting the full sale proceeds into another "like-kind" property, with strict identification and closing deadlines.
A fractional-ownership structure that still qualifies as like-kind real estate for a 1031 exchange, letting an investor exit active management while keeping the tax deferral.
Defers (and can partially exclude) capital gains tax by reinvesting just the gain — not the full proceeds — into a designated Opportunity Zone fund; no replacement real estate required.
Related Terms
More Investing Terms
This definition is provided for general educational purposes and is not financial, legal, tax, or real estate advice. Verify important decisions with appropriately qualified professionals.
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