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dispose of the property owned by the DST and acquire new property The powers of the trustee of the DST in Revenue Ruling 2004-86 were very limited, and the Ruling provided guidance that the DST would not qualify as an investment trust if the trustee had the power to do one or more of the following: that a taxpayer may exchange real property for an interest in the trust without recognition of gain or loss under §1031 if the other requirements of §1031 are satisfied.For a trust to be classified as an investment trust, the trustee must not have the power to vary the investment of the settlor (or any subsequent beneficiaries). It is most helpful when you sell an asset the 1031 exchange allows you to buy a.

Typical transaction structure Types of Transactions Currently Being DoneShopping center and other commercial real estate transactions with existing rental income purchased by DST as “replacement property” for subsequent 1031 transactions.DST typically formed by single settlor who is issued all of the units in the DST settlor sells those units to third parties (generally, those persons seeking replacement property) in 1031 transactions. make more than minor non-structural modifications to the property not required by law.Persons acquiring undivided fractional interests in the DST from the original grantor of the DST are treated as grantors of the DST under IRC §1.671-2(e)(3) and are considered to own the assets of the DST attributable to that interest for tax purposes accordingly, each of such persons are considered for federal income tax purposes to own an undivided fractional interest in the real property owned by the DST. invest cash received to profit from market fluctuations renegotiate or refinance the obligation used to purchase the property

Trustee entitled to rely upon advice of real estate consultant regarding maintenance and sale of property. Property sold prior to end of DST term and proceeds used to pay off Lender. DST term identical to loan and lease terms (with possible reconstitution provision following dissolution at end of term). Property subject to a triple net Master Lease with a term equal to the loan term (lessee under Master Lease subleases property to tenants).