A 1031 DST May Help You Defer Capital Gains

Many property owners want to sell… but feel stuck because of huge capital gains taxes.

You might be thinking:

• “If I sell, I’ll owe too much tax.”
• “I’m tired of being a landlord.”
• “I don’t want to manage another property.”

The good news: You may be able to sell, defer taxes, and stop managing property — by using a 1031 Exchange into a DST.

What Is a 1031 Exchange?

A 1031 Exchange allows you to sell an investment property and defer capital gains taxes by reinvesting into another qualifying investment property.

Normally, that means buying another rental and continuing landlord duties.

But there’s another option.

What Is a DST (Delaware Statutory Trust)?

A DST is a structure that lets multiple investors own shares of a large, professionally managed property, such as:

🏢 Apartment communities
🏥 Medical buildings
🏬 Retail centers
🏭 Industrial properties

When used in a 1031 exchange:

✔ You still qualify for tax deferral
✔ You become a passive investor
✔ No tenant calls or repairs
✔ Professional managers handle everything
✔ You receive potential passive income

Key Benefits of a 1031 DST

💰 1. Defer Capital Gains Tax

You may defer federal and state capital gains tax and depreciation recapture, keeping more money invested.

🧘 2. No More Landlord Stress

No maintenance, no leasing, no day-to-day management.

🏢 3. Access Larger Properties

You can invest in institutional-quality real estate that is normally too large to buy alone.

👨‍👩‍👧 4. Simplified Estate Planning

DST shares are often easier to divide among heirs than physical property.

Who Is This Good For?

A DST may be a fit if you:

✔ Want to sell but avoid a large tax bill
✔ Are tired of managing rental property
✔ Want passive income
✔ Are retiring or moving out of state

⚠️ Important: Plan BEFORE You Sell

1031 exchanges have strict IRS rules and timelines.
If planning is not done before closing, you may lose the chance to defer taxes.

How Cao & Associates Can Help

At Cao & Associates, CPA, we help real estate investors:

✅ Analyze capital gains exposure before selling
✅ Plan and structure 1031 exchanges
✅ Coordinate with Qualified Intermediaries
✅ Review DST suitability from a tax perspective
✅ Handle tax reporting after the exchange

Selling property is not just a real estate decision — it’s a tax strategy decision.

📧 info@caoandassociates.net
📞 425-230-7538
💬 WeChat: WACPA1 (Chinese & English Service)

Plan early. Defer taxes. Move from landlord to passive investor — the smart way.