“The 1031 to 721 Investor Journey”

Tax-advantaged real estate investments leverage the tax code to generate maximum after-tax returns for investors. DSTs offer investors limited liability, asset protection and confidentiality. They also have a life cycle of five to 10 years.

When a DST reaches maturity (going “full cycle”), an investor has a choice. Choosing to continue the investment through another 1031 exchange or a 721 exchange maximizes the tax-deferral benefits. Cashing out triggers an immediate taxable event.

Section 721 – similar to Section 1031 governing real estate exchanges – is a popular alternative to a taxable sale for real estate owners interested in a tax-favored investment with institutional management. Learn more in this educational piece designed to further your understanding.