1031 and Tax-Deferred Passive Investments
Many investors get to a point in their lives where they choose
not to continue to operate their real estate assets in an active capacity. While some are engaged in estate planning and want to leave the equity and income stream to their heirs, who may not be prepared or have the desire to actively manage such assets, and others may want to be removed from such involvement, for more time for themselves.
DST and fund vehicles are best for investors who may prefer to move away from the intensive day-to-day management, an active-owner role requires. We structure portfolios that function as passive income, while still leaving the owner in full control of their real estate investment. We implement a “Structured 1031 Exchange” for such acquisitions to defer any capital gains taxes and/or recapture of depreciation
Delaware Statutory Trusts (DSTs) provide real estate investors with a way to invest passively in commercial real estate. IV Capital Partners acquires high-quality commercial income properties, places non-recourse financing on the properties and provides institutional quality property, asset management, and reporting while providing monthly distributions to all investors. Ownership in the Trust is based on a pro-rata share of the equity invested.
For example, if a property requires $5 million of equity to acquire and an investor purchases $1 million worth of the Trust, they will own 20% of the Trust and, as such, shall receive 20% of the cash flow distributions as well as 20% of the depreciation allocation to shelter the income from income taxes. The Delaware Statutory Trust ownership structure makes these investments ideal for investors who are in a 1031 exchange. The investment amount is flexible, starting at $100,000, which is also beneficial to 1031 exchange investors who are trying to invest an amount equivalent to their down-leg exchange.