The Delaware Statutory Trust (DST) has emerged as a popular vehicle for fractional ownership. Understanding DSTs may help with a 1031 Exchange.

Mr. and Mrs. Walters have just retired at age 67 and 68. During the real estate downturn, they acquired three rental homes in the Central Valley for $200,000 each. They borrowed $140,000 on each. They did a refinance with cash out on two properties.

The Smiths sell a ranch in Central California and exchange into a new ranch in Arizona, but have a $350,000 tax liability.

The Johnsons deferred a $725,000 tax liability and strategically diversified their proceeds to help manage risk and provide management-free income potential for their retirement.