For most investors commercial real estate is leveraged financially. Many of these investments grow in value due to market growth, adding value with improvements like esthetics, new or improved structures and/or good paying tenants. To capitalize on this value the investment(s) are sold and typically rolled into another bigger, better investment(s). In order to for the investor to not be taxed on these capital gains the government has vehicles(plans) in place to allow the investor to defer, put off paying these taxes. This is where a 1031 Exchange, also known as a Starker Exchange or Like-Kind Exchange, comes in to play. The term 1031 Exchange is defined under section 1031 of the Internal Revenue Code (IRC). Simply, this allows a real estate investor to shift the focus of their investing without incurring the tax liability. There are a few vehicles to choose from to defer the tax liability based on the investor’s overall strategy. This article focuses on the 1031 Exchange and a DST (Delaware Statutory Trust)
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