Overview
Learn how to recognize planning opportunities when clients are considering the sale of appreciated investment real estate. This course explores the fundamentals of Section 1031 exchanges, including critical timing requirements, qualified intermediaries, replacement-property rules, and common pitfalls that can jeopardize tax deferral. Participants will also examine Delaware Statutory Trusts (DSTs) as a potential replacement-property strategy, including their benefits, limitations, risks, and due diligence considerations. Practical case studies will help financial professionals identify when clients may benefit from additional planning before a real estate sale closes.
Objectives
Upon completion of this course, participants will be able to:
- Explain the fundamental requirements of a Section 1031 exchange, including key deadlines, qualified intermediary requirements, replacement-property rules, and factors that may result in taxable boot.
- Describe how Delaware Statutory Trusts (DSTs) may be used as a replacement-property strategy within a 1031 exchange and evaluate their potential benefits, limitations, and risks.
- Identify common client circumstances and warning signs that indicate the need for early tax, investment, estate-planning, or other professional guidance before the sale of investment real estate.
Major Topics
1031 Exchange Fundamentals and Common Pitfalls – Like-kind property, the 45- and 180-day deadlines, qualified intermediaries, full-deferral requirements, debt replacement, boot, and common exchange failure points.
Delaware Statutory Trusts as a Replacement-Property Strategy – How DSTs work, their role in 1031 exchanges, passive ownership, diversification, income and debt replacement considerations, the “Seven Deadly Sins” of DSTs, and the master lease structure.
Client Planning, Risk Assessment, and Due Diligence – Case studies, estate-planning considerations, DST benefits and tradeoffs, sponsor and property review, financial and legal due diligence, red flags, and referral triggers.
