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<p>[QUOTE=&quot;imrich, post: 26136586, member: 22331&quot;]Thank you for your factual post.</p><p><br /></p><p>Here is a BRIEF partial description of the EXCHANGE process:</p><p><br /></p><p><i>&quot;Tax-Advantaged Solution</i></p><p><br /></p><p><br /></p><p><br /></p><p>A tax law provision known as a Section 1031 Exchange allows a real estate owner who holds property for business or investment purposes to exchange their property for other “Like-Kind” property and<b><span style="color: #ff4d4d"><u> defer</u></span></b> paying any tax on the Exchange.</p><p><br /></p><p><br /></p><p><br /></p><p>The use of the word “Exchange” is somewhat confusing. In most 1031 Exchange transactions, it is actually a sale of your property followed at a later date by your purchase of another property. You can Exchange (sell) any investment or business real estate and Exchange (purchase) any other type of business or investment real estate.</p><p><br /></p><p><br /></p><p><br /></p><p>An example would be timberland property exchanged for some type of income producing rental property such as a multi-family apartment complex, a self-storage property, or even a mineral royalty interest, etc. These properties could be acquired and professionally managed inside a Delaware Statutory Trust (DST).</p><p><br /></p><p><br /></p><p><br /></p><p>The DST is created by billion-dollar real estate sponsors and management companies. A DST permits fractional ownership where multiple investors can share ownership in a single property or a portfolio of properties, which qualifies as replacement property as part of an investor’s 1031 Exchange transaction. A major advantage of purchasing a DST interest is there are no management responsibilities for the investor.</p><p><br /></p><p><br /></p><p><br /></p><p><i>Exchange Process Utilizing </i></p><p><br /></p><p><br /></p><p><i>DST Replacement Property</i></p><p><br /></p><p><br /></p><p><br /></p><p>1. Exchanger (Owner) sells his property, known as the “Relinquished Property,” and proceeds are escrowed with a Qualified Intermediary (QI).</p><p><br /></p><p><br /></p><p><br /></p><p>2. QI, through a written agreement with the Investor, transfers funds for the purchase of the “Replacement Property.”</p><p><br /></p><p><br /></p><p><br /></p><p>3. Exchanger (Owner) receives a beneficial fractional interest in a DST. The DST Owner will begin to receive monthly income from the DST and will receive his or her share of the sales proceeds when the property is sold in the future.</p><p><br /></p><p><br /></p><p><br /></p><p>A Qualified Intermediary is an independent third party, institutional entity, that facilitates Section 1031 Tax Deferred Exchanges. The QI receives and holds the proceeds from the sale of the Relinquished Property in a Trust or Escrow Account to ensure the Exchanger (owner) never has actual or constructive receipt of the sales proceeds which would trigger capital gains consequences.&quot;[/QUOTE]</p><p><br /></p>

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