Navigating real estate investment strategies in a city as complex as New York requires a clear understanding of tools that allow investors to preserve wealth and defer tax liabilities. At Sishodia PLLC, New York City 1031 exchange lawyer Natalia A. Sishodia (https://sishodia.com/benefits-of-a-1031-exchange-delaware-statutory-trust-dst/) is highlighting the critical role that Delaware Statutory Trusts (DSTs) can play in helping investors meet the strict deadlines and requirements of a 1031 exchange.
A 1031 exchange lawyer in New York City can help property owners legally defer capital gains taxes by exchanging one investment property for another of like kind. While the process offers valuable tax advantages, the details can be demanding. Natalia A. Sishodia provides guidance on how Delaware Statutory Trusts can simplify and strengthen a real estate investor’s 1031 exchange strategy.
DSTs offer investors an opportunity to acquire a fractional interest in high-value real estate without direct management responsibilities. This structure is particularly attractive for investors seeking to meet the 45-day and 180-day deadlines associated with a 1031 exchange. According to Natalia A. Sishodia, a New York City 1031 exchange lawyer at Sishodia PLLC, DSTs can “help you hit the timelines and match your reinvestment amount, especially if you want truly hands-off ownership”.
A Delaware Statutory Trust (DST) is a legal entity formed under Delaware law that allows multiple investors to co-own real estate properties. The IRS, through Revenue Ruling 2004-86, permits the use of DSTs in 1031 exchanges, provided they are structured correctly. This enables investors to maintain compliance with IRS rules while potentially gaining access to institutional-grade real estate such as industrial properties, multifamily developments, and retail spaces.
For investors unfamiliar with real estate structures like DSTs, Natalia A. Sishodia, a seasoned New York City 1031 exchange lawyer, advises working with legal counsel to understand the full range of available options. DSTs differ from other investment formats like Tenancy-in-Common (TIC) or direct ownership. While DSTs offer less control, they provide advantages in terms of speed, diversification, and the simplicity of closing documentation. These features can be crucial for investors working within the tight timelines that the IRS imposes on 1031 exchanges.
Natalia A. Sishodia brings years of experience in real estate transactions to clients of Sishodia PLLC. She assists domestic and international investors throughout the entire transaction process—from contract to closing—while also offering tax-conscious solutions that align with each investor's financial goals. Her work spans a wide range of real estate types including condos, co-ops, single-family homes, and commercial properties.
“Many investors look for ways to cut the bill, and a 1031 can help with deferring taxable gains using 1031 exchanges,” she explains. However, she also notes the importance of proper structuring and legal review when using a DST, especially when significant sums and long-term goals are involved.
DSTs come with unique considerations. While they can allow for tax deferral, estate planning advantages, and income potential, they also involve risks such as limited liquidity, loss of control, and exposure to market fluctuations. DST interests are typically offered through private placements and are often limited to accredited investors. For these reasons, Sishodia encourages those interested in DSTs to consult a qualified New York City 1031 exchange lawyer before making any investment decisions.
The appeal of DSTs is further enhanced by their alignment with estate planning strategies. If an investor passes away while holding a DST interest, heirs may benefit from a stepped-up basis under IRC §1014, potentially eliminating the previously deferred gain. This makes DSTs a viable option not only for active investors but also for those planning generational wealth transfers.
DST sponsors—usually large real estate firms—are responsible for sourcing, acquiring, and managing the properties within each trust. This means that investors benefit from professional management and property selection, without needing to deal with leasing issues, repairs, or tenant disputes. For many, this represents an ideal way to stay invested in real estate while reducing personal oversight.
Natalia A. Sishodia emphasizes that even experienced investors can benefit from a legal consultation. "While online materials can be useful, nothing is as helpful as speaking with a legal professional whose practice involves real estate matters in New York," she notes.
For those considering the transition from direct property ownership to a more passive investment structure, DSTs provide a compelling alternative that aligns with 1031 exchange requirements. The potential for tax deferral, diversification, and reduced management responsibilities makes DSTs an increasingly popular option among seasoned real estate investors.
Sishodia PLLC continues to guide clients through complex real estate transactions, helping them make informed decisions that support both immediate goals and long-term financial planning. Investors seeking a smoother, more efficient exchange process are encouraged to explore how a DST might fit within their broader investment strategy.
Those interested in learning more about 1031 exchanges and DSTs should speak with Natalia A. Sishodia to explore options tailored to their real estate and tax planning objectives.
About Sishodia PLLC:
Sishodia PLLC is a New York City-based law firm that provides legal services in real estate, tax-deferred exchanges, estate planning, and multijurisdictional wealth management. The firm is led by managing partner Natalia A. Sishodia, Esq., LL.M., who serves both domestic and international clients with a practical, detail-driven approach to real estate law and transactional planning.
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