Fortitude's Insights

The Delaware Statutory Trust: A Practical Solution for Legacy Planning

Posted by Roy Pfleger on Nov 29, 2018 4:31:17 PM

The Delaware Statutory Trust (DST) is gaining popularity as a viable solution for accredited real estate investors seeking replacement property for their 1031 exchanges. For those unfamiliar, a Delaware Statutory Trust is a legal trust structure under Delaware law recognized under Revenue Ruling 2004-86 that offers accredited investors fractional ownership of beneficial interests to satisfy their 1031 exchange needs.

A DST comes to accredited investors as a package program that offers them potential annual income, credit for any nonrecourse debt associated with the DST, the potential for appreciation or equity growth all while being managed by major real estate institutions within the United States. As the commercial real estate market continues to appreciate, real estate investors want to take advantage of their highly appreciated asset(s) but struggle to find replacement property.

This story is not just for the “mom-and-pop” real estate owners!

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Topics: Delaware Statutory Trust

1031 Exchange Utilizing the DST: Information For Real Estate Sellers

Posted by Jeffrey Kiesnoski on Oct 23, 2018 5:16:00 PM

In a time when property sales are beginning to heat up again in hot markets across the United States, many sellers are stuck with selling their properties only to make lateral moves for the sake of completing their 1031 exchange. What many sellers, along with their professional real estate attorneys, CPAs and Qualified Intermediaries, are not familiar with is the 1031 securitized real estate exchange utilizing the Delaware Statutory Trust (DST) that is available to accredited investors only.

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Topics: Delaware Statutory Trust, 1031 Exchange

Fortitude Investment Group, LLC Announces Another Successful 1031 Real Estate Exchange Utilizing the DST

Posted by Daniel Raupp on Sep 26, 2018 12:56:00 PM
Fortitude Investment Group, LLC Is Proud to Announce Another Successful Full Cycle 1031 Real Estate Exchange Utilizing the Delaware Statutory Trust, DST, for Their High Net Worth Accredited Investors 
Press Release - Sep 21, 2016 08:21 EDT

New York, NY, September 21, 2016 (Newswire.com) - Co-Founders Daniel P. Raupp, Jeffrey A Kiesnoski and Jon Paul Cirelli of Fortitude Investment Group successfully facilitated a Full Cycle 1031 Real Estate Exchange utilizing the Delaware Statutory Trust, DST, for a high net worth, accredited investor with the recent announcement from Inland Private Capital Corporation disposition of a FedEx ground facility in Zionsville, Indiana.

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Topics: Delaware Statutory Trust, 1031 Exchange

Disaster Relief IRS Issued Tax Relief & 1031 Extensions

Posted by Daniel Raupp on Sep 1, 2018 12:47:00 PM

Deadlines for completing a 1031 Exchange are straightforward. Once you close on the sale of your old property, you have 45 days to locate the new property that you want to purchase and 180 days to complete the purchases of the new property.

However, when a catastrophic event that affects large numbers of people, such as hurricanes, tornados, wildfires, floods and terrorist actions occur, the government may issue tax relief extensions, which also may extend your 1031 deadlines.

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Topics: 1031 Exchange, Tax Relief

1031 Real Estate Exchanges & Alternative Options

Posted by Jeffrey Kiesnoski on Jul 12, 2018 10:25:00 AM

Simply put, in the real estate industry, a 1031 real estate exchange is a switch of one real estate asset for another investment property that is not personal (such as a primary residence).

If you have a profit on an investment property that you are relinquishing, you will most likely be subject to capital gains tax. Depending on what state you live in, this tax can be north of 30%. Under current policy there is no limit to the amount of 1031 exchanges you can facilitate. In other words, “Swap till you Drop”.

Fortitude Investment Group believes this is one of the greatest estate planning tools afforded to real estate investors due to the stepped-up cost basis on inherited assets.

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Topics: Delaware Statutory Trust, 1031 Exchange

Understanding Depreciation Recapture for your 1031 Exchange

Posted by Daniel Raupp on Jul 6, 2018 1:16:00 PM

Depreciation recapture is a significant factor in participating in a like-kind exchange. While capital-gains tax rates are currently at historical lows, tax rules require you to recapture the portion of the gain on the sale that relates to allowable depreciation over the period the asset was held.  Additionally, you must recapture it at a higher tax rate (typically 25%).

For the purpose of discussion, the depreciation recapture rules assumes that:

(a) your regular marginal income tax bracket is greater than 15%, and

(b) the real estate sold is the only business asset sold by you in the tax year of the sale

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Topics: 1031 Exchange, Depreciation Recapture

Dos and Don'ts of 1031 Exchanges

Posted by Daniel Raupp on Jun 28, 2018 10:39:00 AM
1031 exchange is a practice named after a section of the IRS tax code. It allows taxpayers to potentially defer capital gains taxes from the sale of a property if they meet certain conditions. Those conditions can be complicated, tricky and confusing.To make sure you’re on the right path, pay close attention to these do’s and don’ts as you set up a 1031 exchange.
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Topics: 1031 Exchange

Fortitude Investment Group, LLC. Executes Record Investment for a Family’s 1031 Exchange into a DST Real Estate Portfolio

Posted by Daniel Raupp on Dec 11, 2017 5:48:11 PM

One might think that passive real estate investments are for the less sophisticated and smaller real estate owners and investors.  They would be wrong. 

Daniel P. Raupp and his team at Fortitude Investment Group, LLC have just set an industry record by facilitating an investment of $176,000,000.00 worth of real estate proceeds from the sale of a portfolio held by a very successful and real estate savvy family who needed to complete a complex 1031 Exchange. 

This individual transaction had multiple moving parts and involved more than twenty entities and six branches within the family.

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Topics: 1031 Exchange, Delaware Statutory Trust

Condemned Property and a 1031 Exchange

Posted by Daniel Raupp on Jun 24, 2017 12:15:00 PM

If a property will be condemned in the future and the landlord will receive a condemnation award, should they do a 1031 exchange with the proceeds and buy a new property?

Keep in mind, the 1031 option may be restrictive. With the 1031 exchange, the landowner cannot take possession of the money; instead the money must go directly to a Qualified Intermediary (QI) to qualify for a 1031 exchange. If the condemnation award check is made out to the landowner, a 1031 exchange is no longer an option.

Additionally, once he gets the condemnation award, he has 45 days to identify a property. The landowner is locked into the subject property and then has 135 days to close. In other words, he has only 180 days to identify and close on a property.

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Topics: 1031 Exchange, 1033 Exchange, Delaware Statutory Trust

Attention Real Estate Attorneys, Certified Public Accountants, Investment Property Real Estate Brokers and Qualified Intermediaries!

Posted by Jeffrey Kiesnoski on Feb 17, 2017 4:25:42 PM

After speaking with real estate attorneys, CPAs, and investment property real estate brokers on a daily basis, we have come to realize that the majority of these professionals are unaware of the 1031 Exchange utilizing the Delaware Statutory Trust (DST) as a potential option for their accredited investor clientele who are in need of replacement properties.

There are many investment property real estate owners that have held onto properties for decades and have realized large capital appreciation on their property assets. Unfortunately, many of the investors are at a point in their lives where they would like to sell their properties but are hesitant to do so because of the large capital gains tax they could be facing. Many of these investors are tired of what we call the three ‘T’s—toilets, tenants and trash!

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Topics: 1031 Exchange

DST 1031 properties are only available to accredited investors (generally described as having a net worth of over $1 million dollars exclusive of primary residence or $200,000 income individually/$300,000 jointly of the last three years) and accredited entities only. If you are unsure if you are an accredited investor and/or an accredited entity please verify with your CPA and Attorney. There are risks associated with investing in real estate and Delaware Statutory Trust (DST) properties including, but not limited to, loss of entire investment principal, declining market values, tenant vacancies and illiquidity. Diversification does not guarantee profits or guarantee protection against losses. Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated. The information herein has been prepared for educational purposes only and does not constitute an offer to purchase or sell securitized real estate investments. Because investors situations and objectives vary this information is not intended to indicate suitability for any particular investor. This material is not to be interpreted as tax or legal advice. Please speak with your own tax and legal advisors for advice/guidance regarding your particular situation. Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services offered through Concorde Asset Management, LLC (CAM), an SEC registered investment adviser. Insurance products offered through Concorde Insurance Agency, Inc. (CIA). Fortitude Investment Group is independent of CIS, CAM and CIA.

About This Blog

With over 100+ years of combined experience facilitating 1031 exchanges, including the largest 1031 exchange utilizing DST’s in our industry, we are your trusted partners in helping you achieve success.  We believe that education and service matter, and we are committed to providing our clients with the resources required to facilitate the entire exchange process.

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