New York City 1031 Exchange Lawyer Natalia Sishodia Discusses the Benefits of a 1031 Exchange Delaware Statutory Trust (DST)

New York City 1031 exchange lawyer Natalia Sishodia releases a new article (https://sishodia.com/benefits-of-a-1031-exchange-delaware-statutory-trust-dst/) outlining the benefits and limitations of a Delaware Statutory Trust (DST) 1031 Exchange. The lawyer mentions New York real estate investments come in many forms. This gives investors many options. There are many tax considerations when investing in real estate. Investors tend to look for options where they have a lower tax burden.

“In the world of real estate, a 1031 exchange refers to a swap/exchange of property that is held specifically for business or investment purposes. Per IRS code section 1031, an investor can swap one investment property for another like-kind (tax-deferred transaction) investment property to avoid paying taxes on capital gains on the sale of the property. There is also no limit on how many times or how frequently investors can do 1031 exchanges,” says the New York City 1031 exchange lawyer.

The lawyer explained that even though 1031 Exchanges may be attractive for investors, it can be difficult to comply with IRS requirements. This is where Delaware Statutory Trust, (DST), comes into play.

Attorney Natalia Sishodia explains that a Delaware Statutory Trust (DST) is a legal entity that can be used as a trust for the purpose of conducting business. Even though the name includes Delaware, it is a term that is used to describe a similar entity in any state. DSTs are often used for real estate transactions.

According to attorney Sishodia, "To benefit from DSTs, investors can sell the original investment property for an interest in a DST and become a fractional investor alongside other owners/investors. By choosing to transfer ownership from a 1031 property into a DST, the investor/property owner is no longer responsible for the burdens of managing the 1031 property."

Additionally, the real estate lawyer explained that IRS rules can be complex and difficult to understand. Even for experienced investors, it can be hard to figure out how to benefit from the IRS code section 1031 by using a DST. An experienced real estate lawyer is recommended for this kind of situation. A skilled attorney may be capable of helping the investor navigate the tax laws.

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