1031 Exchanges


Powerful Tool to Defer Capital Gains Tax

Additional Reasons to Participate
in a 1031 Exchange

  • Relieve the burden of active real estate ownership
  • Obtain ownership in shopping centers, multifamily residential and/or triple-net property in good locations
  • Diversify your real estate portfolio by geography and property type
  • Invest in single asset and/or multiple asset offerings
  • Choose from highly leveraged, moderately leveraged, or no leverage offerings
  • Facilitate estate planning
  • Choose from many sectors, including retail, office, industrial and multifamily

While there are many benefits to 1031 DST investing, there are strict timing limitations. Specifically, if a 1031 exchange transaction is not properly constructed and executed in a timely manner, then an investor may lose all tax benefits of such transaction, including depreciation recapture. The relinquished property must be a qualifying property (i.e., like-kind replacement property). A Qualified Intermediary, as an independent third party, is needed to facilitate a 1031 exchange transaction and hold the funds on behalf of the investor.


Our program make it possible for every accredited investor, even those without a property to exchange, to participate in the ownership of commercial real estate. Investors may make a cash investment in any interests offered by our sponsors.
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In accordance with the Internal Revenue Service's Revenue Ruling 2004-86, and subject to specified conditions, investors may purchase a beneficial interest in the Delaware Statutory Trust which hold the replacement property.
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The reasons to participate in a 1031 exchange are numerous. There are specific timelines and procedures that must be followed to take advantage of the benefits of this program. Please contact us to see if the strategy is right for you.
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Program Structure

There are three basic steps in any 1031 exchange:

  1. Exchanger sells property and proceeds are escrowed with a Qualified Intermediary (ask for a referral)
  2. Qualified Intermediary (or Q.I.) transfers funds for purchase of replacement property
  3. Exchanger receives beneficial interest in the Delaware Statutory Trust.
San Jose DST 1031 Exchange


Guidelines to Remember

  • Seller should have the contract specify that the sale may be structured as a 1031 exchange.
  • Seller cannot receive or control the net sale proceeds – the proceeds must be deposited in a qualified escrow.
  • Replacement property must be like-kind to the relinquished property.
  • The replacement property must be identified within 45 days from the sale of the original property.
  • The replacement property must be acquired within 180 days from the sale of the original property.
  • In a reverse exchange the taxpayer acquires the replacement property prior to disposing of the relinquished property.
  • Generally, the cash invested in the replacement property must be equal to or greater than the cash received from the sale of the relinquished property.
  • The debt placed or assumed on the replacement property must be equal to or greater than the debt relieved with regard to the relinquished property.

*The Sherer Group, LLC. does not offer tax advice. This material is not intended to replace the advice of a qualified tax advisor. Investors should consult with their tax advisors before pursuing a 1031 exchange.