1031 Exchanges Threatened as Commercial Lenders Halt Loan Applications – Deferred Sales Trusts the Solution

The New York Real Estate News reported that the marketplace where lenders sell mortgages on office buildings, rental properties and other types of commercial real estate has ground to a halt as traders try to figure out how to price in risk amid the COVID-19 pandemic. Possible Impact to Real Estate 1031 Exchanges We are …

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How are DST Funds Protected?

In previous articles, we have discussed how the Deferred Sales Trust (DST) is a specialized form of Installment Sale under IRC 453.  Under an installment sale to a DST Trust, the entire course of the transaction and its continued operation revolves around a secured installment note in favor of the Seller. The term ‘secured’ means …

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How Do You Structure Repayment Terms for a Deferred Sales Trust Installment Note

Generally, the terms of note will be Seller driven and the resulting terms must be reasonable and commercially viable.  The initial term we would offer would be anywhere from 1 year to 10 years… Seller picks their desired term.    The payback structure is very flexible in that the seller could:  defer receiving payments for up …

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Bifurcated Exchanges into a 1031 Exchange and a Deferred Sales Trust

Bifurcated Exchanges into a 1031 Exchange and a Deferred Sales Trust with the possible use of a Delaware Statutory Trust for the 1031 Exchange Upside Replacement Property The usual 1031 jargon is “up in value, up in loans”.   In a bifurcated 1031 exchange you are doing 2 transactions-  (1) a 1031 exchange and (2) a …

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Can the Deferred Sales Trust Help Partners Wind Up Their Partnership in Real Estate Ownership?

It is not uncommon for friends or family members to pool their resources together to invest in Real Estate.  Often times they employ a strategy where they systematically use a vehicle known as a 1031 exchange to reinvest in more valuable properties using tax deferral to allow their assets to grow more quickly. As with …

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Using the Deferred Sales Trust™ to Rescue a Failed 1031 Exchange

1031 Exchanges and Deferred Sales Trust™ are both based on the structuring of sales transactions to avoid actual or constructive receipt of the immediate sales proceeds by the seller. Used as a backup strategy, the Deferred Sales Trust™ preserves tax deferral when the seller cannot successfully complete a 1031 Exchange or does not wish to …

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