My parents will be closing on the sale of our family ranch in the next 30-60 days. Proceeds of the sale will be ~$3.1MM. They don't want to do a traditional 1031 into rental property or more land and are looking at some way to utilize the proceeds for retirement without taking a big capital gains tax hit. A 1031 exchange involving a Delaware Statutory Trust seems to fit.

Does anyone have experience using a DST for a 1031? Pros/cons? From my web based research, it seems like a good vessel to shelter/delay capital gains while providing some type of "rental" or investment income.

My parent's haven't ever had a financial advisor, but I've gotten them in touch with one firm, but would like to get another opinion or two before they move forward. I would love some suggestions on firms/advisors in Austin or Houston that deal in 1031 exchanges and can provide some comprehensive retirement planning.

ZoneClub said:

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PM me. I deal with Delaware Dynasty Trusts a lot.

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I don't have stars, but my email is username @ gmail.

Very interested to see how this works and your parents experience in using them. would look into them as well. Thanks!

Me too....interested

devastor said:

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Very interested to see how this works and your parents experience in using them. would look into them as well. Thanks!

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I haven't heard from ZoneClub yet.

The adviser my parents have been in touch with is an Ag, who had good recommendations, and has worked up a preliminary plan. The properties he's provided appear to be returning 5-6% annually. Principle goes in for a set period of time, most seem to be 5-10 years, while it earns interest/rent payments. Apparently the "trust" qualifies as a 1031 exchange property due to the way it's structured. After 5-10 years when the principle is "paid back", you roll it into another trust. Any interest/rent earned is taxed at your normal rates and can be invested in any other options, and as long as the principle keeps being rolled into other 1031 "trusts" you don't take a capital gains hit.

Makes sense on the surface, but I feel like there are likely some hidden gotchas. My parents are looking for a retirement revenue stream not associated with being a landlord (they own other rental properties). Considering the value of the investment, I feel like we need to talk with a few people before going forward. I'm also the sole heir and would love to structure it so their retirement/medical needs are taken care of while retaining the principle, and avoiding estate/other taxes, after they die.

PM me I have a group that might have some different options for you.