Investment Insights from Perch Wealth

How DST Sponsors Report Taxes at Year-End

Episode Summary

In this episode, we will discuss the tax advantages of investing in commercial real estate, whether directly or passively, through a syndication, fund, or Delaware Statutory Trust (DST). Our focus will be on DSTs, an investment vehicle that allows investors to invest in commercial property fractionally. We will explain how DST income is reported, including the IRS classification of DST ownership as direct ownership of real estate for tax purposes. Investors receive a "substitute 1099" from the DST sponsor that includes their pro-rata share of income and expenses associated with the DST's assets, which they must report on their tax returns. We will cover the key deductions that DST investors can write off, including expenses and depreciation, and how to avoid common mistakes when reporting DST income. We will also discuss tax filing deadlines and the importance of working with a tax professional experienced in DSTs to ensure compliance with IRS guidelines while maximizing potential deductions. Tune in to learn more about the tax advantages of investing in commercial real estate through DSTs.

Episode Notes

Read more about how to cash out members of an LLC in a 1031 Exchange: https://perchwealth.com/how-DST-sponsors-report-taxes-at-year-end.html

Learn more about Perch Wealth: https://perchwealth.com/index.html

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