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Comparing 1031 and 1033 Exchanges

No, that reference you skimmed on a tax-deferred exchange website about 1033 exchanges was not a typo. 1033 exchanges do exist, and they do allow real estate owners to replace one property for another while deferring capital gains taxes. 1033 exchanges, however, are not an alternative to 1031 exchanges and are not an exchange strategy you’ll likely consider including in your investment plans.

Pros and Cons of Investing in a Delaware Statutory Trust

Pros and Cons of Investing in a Delaware Statutory Trust

Delaware Statutory Trusts (DSTs) provide a unique investment opportunity. As a form of fractional ownership, DSTs allow investors to expand their reach to larger properties with a quick and simple process. These trusts provide a chance for real estate investors to enjoy the benefits of ownership without taking on property management responsibilities. They also qualify as a 1031 exchange, offering valuable tax benefits.

On the other hand, not all investors will find DSTs desirable. These investments offer limited control and incur certain risks. In addition, their illiquid nature means they're only suitable for those interested in a long-term commitment. Before deciding when and how to invest, consider Delaware Statutory Trust pros and cons. Find out if investing in a Delaware Statutory Trust is right for you.

1031 Exchange Holding Period Guide

Guide to 1031 Exchange Holding Periods

In plain terms, a holding period is the amount of time one owns or holds a particular asset before relinquishing it. The holding period is essential to qualifying for a 1031 exchange. Specifically, the holding period must be met before replacement properties can be used for personal purposes like a vacation home or primary residence. In addition, meeting the exchange holding period is key for transferring ownership of a replacement property.

Can You Do a 1031 Exchange With a Family Member?

A 1031 exchange with family is possible if you adhere to strict rules and guidelines. Because the IRS has added numerous restrictions to curb tax abuse, it's important to understand the parameters involved before initiating an exchange with a related party.