During the last two years, the syndicated 1031 exchange market, primarily existing of Delaware Statutory Trust (DST) programs with a few Tenant-in-Common (TIC) programs, has experienced a surge in transactions, raising record amounts of equity. Though real estate analysts anticipated this surge, the actual transaction amounts exceeded expectations.
Owing more in tax than what you received from sale.
You may wonder how some people end up with a tax bill that is larger than the amount of cash they take home from the sale of their property. Or maybe this is your current circumstance and you don’t know how you got here. We’d like to take a moment to offer an explanation of how this is possible so that you don’t find yourself in this unfortunate circumstance.
It is not too hard to argue that the more money you invest, the more money you can make. So if you could defer paying taxes and use that money to increase the amount of your next investment, wouldn’t you do it? Of course you would at least look into it. Let us answer some of the common questions about 1031 Exchanges-DST's and REIT's.