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What is a 1031 exchange?

A 1031 Exchange may allow you to defer the payment of capital gains taxes when you sell a business or investment property. Generally, you have to pay capital gains taxes if you profit from that sale. The exchange process may allow you to reinvest the proceeds into a qualifying “like-kind”piece of real estate and defer the payment of capital gains taxes. The Internal Revenue Service (IRS) defines like-kind as property similar in nature or character, regardless of differences in grade, property type, or quality.
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What is a Qualified Opportunity Zone?

The Qualified Opportunity Zone (QOZ) program was established in 2017 as a component of the Tax Cuts and Jobs Acts. It was designed with the primary goal of uplifting economically disadvantaged communities and census tracts throughout the nation. The program offers incentives to investors by allowing them to channel funds into these communities, fostering development and job creation. In return, investors receive temporary tax deferral benefits and, eventually, complete elimination of tax liabilities.
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Why Use A DST To Complete A 1031 Exchange?

Typically, a 1031 Exchange involves an investment property owner and a real estate broker. However, there is an alternative passive solution to meet the requirements of a 1031 Exchange: the Delaware Statutory Trust (DST). Properly structured DSTs are recognized by the IRS as qualified replacement property for real property.An investor in a DST does not directly own the real estate within the trust. Instead, the trust holds title to the property for the benefit of multiple investors, each of whom holds a "beneficial interest" and is considered an undivided fractional owner of the property. DSTs provide an alternative solution for real estate investors who may lack the time or resources to find and manage a replacement property. They are versatile and may be used for all or a portion of the proceeds from a sale.With DSTs, investors may benefit from owning a diversified portfolio of real estate without the responsibility of active management. DSTs are professionally managed by experienced experts who oversee all aspects of the investment, from property management to accounting and reporting. This passive investment option offers investors the potential for cash flow and long-term appreciation without the need for hands-on involvement.

DST Risk Considerations

A Delaware Statutory Trust (DST), and other private placement offerings involve risks including those risks typical of traditional real estate offerings including illiquidity and concentration risks associated with local markets. Investors must read and understand all risk disclosures in the applicable full disclosure private placement memorandum (PPM) that would accompany any DST, or any other private placement offerings. Potential risks relating to each investment in a DST, and other private placement offerings are disclosed in a private placement memorandum that must be read by the investor prior to making an investment decision. These risks include but are not limited to:Illiquidity (there is currently no secondary market); Tax status risk which may result in immediate tax liabilities, including penalties; The fact that substantial fees associated with the purchase of the investment may, in certain cases, outweigh the tax benefits; The significant tax risks for acquiring interests as replacement property; The risks of using leverage in real estate; The investment is speculative and involves a high degree of risk; The risks associated with fractionalized ownership in real estate and investment contracts as securities; Property appreciation is not guaranteed; The potential for loss of principal invested; There is no assurance for monthly distributions or income and no guarantee for potential appreciation; these offerings are illiquid and an investor no longer has daily management of a property; a 1031 Exchange DST can be adversely impacted by changing interest rates; and Other certain risks disclosed in detail within the Private Placement Memorandum that should be reviewed before investing.

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RISK CONSIDERATIONS
Please note that the information above is for informational purposes. An offer to buy or sell or any solicitation can only be made to qualified accredited investors through a prospectus or private placement memorandum, which is always controlling and supersedes the information contained herein in its entirety. All investments have inherent risks. Potential risks relating to each investment are disclosed in a private placement memorandum that must be read by the investor prior to making an investment decision. Diversification does not guarantee profits or protect against losses.

An investment in a DST, and other private placement offerings involve a high degree of risk. You should purchase only if you can afford a loss of some or all of your investment. You should carefully consider the information set forth in “Risks” above and the corresponding section in the Private Placement Memorandum (PPM) of the particular offering that you are examining. This type of investment is not suitable for all investors.

DST investments are subject to subject to the various requirements and restrictions of Section 1031 of the United States Internal Revenue Code. IRC Section 1031, IRC Section 1033, and IRC Section 721 are complex tax codes; therefore, you should consult your tax and legal professional for details regarding your situation.

There are material risks associated with investing in DST properties and real estate securities including tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks and development risks.

Please also note that this opportunity is being presented to you based on your representation to us that you are an accredited investor. The Security and Exchange Commission defines an accredited investor as an individual with either $1 million in net worth (excluding the equity in your principal residence) or net income for the last two years of $200,000 or greater ($300,000 if spouse has income) with a reasonable expectation of such earnings in the current year. If you do not meet this definition of an accredited investor, please notify us immediately and disregard all marketing materials associated with this websites’ contents.

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