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# 1031 Exchange Place

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## Posts
- [Valuing a DST Interest for Forms 706 and 709](https://1031dstinvestment.org/articles/valuing-a-dst-interest-for-forms-706-and-709/): Valuing a DST interest for Forms 706 and 709 requires more than multiplying an ownership percentage by the sponsor's estimated property value. The appraiser must identify the property interest transferred, select the correct valuation date, reconcile real estate and interest-level evidence, account for debt, and analyze restrictions under Section 2703. The return preparer then must connect that conclusion to the form, the beneficiary's basis records, and any consistency reporting.
- [Gifting a DST Interest to an Irrevocable Trust](https://1031dstinvestment.org/articles/gifting-a-dst-interest-to-an-irrevocable-trust/): Gifting a DST interest to an irrevocable trust can be a valid lifetime transfer, but the trust label does not determine the tax result. The planning team must identify whether the gift is complete, whether the trust is a grantor or nongrantor trust for income-tax purposes, whether the DST sponsor will recognize the transfer, and how basis, debt, passive losses, and future estate inclusion will be treated. A transfer that removes appreciation from the donor's estate can also preserve a low income-tax basis.
- [When a DST Interest Passes at Death](https://1031dstinvestment.org/articles/when-a-dst-interest-passes-at-death/): An inherited DST interest does not receive a new income-tax basis merely because someone died. The result depends on who was treated as owning the property, whether the property is within Section 1014, what is included in the decedent's gross estate, and how the interest is valued. Even when a basis adjustment applies, the fiduciary still must reconcile estate-tax value, the DST's underlying asset records, suspended passive losses, and the sponsor's transfer process.
- [1031 Exchanges and Irrevocable Trusts](https://1031dstinvestment.org/articles/1031-exchange-irrevocable-trust/): Yes, an irrevocable trust can use Section 1031. A successful 1031 exchange irrevocable trust transaction depends on identifying the federal income-tax owner, preserving that taxpayer through both exchange legs, and confirming that the trustee has authority to act. The trust's label does not decide the result. An irrevocable trust may be a grantor trust, a nongrantor trust, or partly each, and those classifications lead to different ownership and reporting plans.
- [Can a Trust Complete a 1031 Exchange?](https://1031dstinvestment.org/articles/1031-exchange-trust-estate-planning/): Yes, a trust can complete a 1031 exchange when the trust property qualifies and the transaction preserves the correct federal taxpayer. The central issue in a 1031 exchange trust analysis is not simply whether a deed names a trust. It is whether the trust is ignored as a grantor trust or treated as a separate taxpayer, and whether that same tax owner transfers the relinquished property and receives the replacement property.
- [1031 Exchange State Taxes Across State Lines](https://1031dstinvestment.org/articles/1031-exchange-state-taxes/): A qualifying exchange may defer federal gain and often state gain, but 1031 exchange state taxes do not follow one national rulebook. The state where the relinquished property sits may require withholding paperwork, annual reporting, a nonresident return, or tax on the original deferred gain years later. Moving or buying replacement property in a no-income-tax state does not automatically erase the first state's claim.
- [Rental Property Adjusted Basis Before a 1031 Exchange](https://1031dstinvestment.org/articles/adjusted-basis-rental-property/): For an adjusted basis real estate calculation, start with the property's original cost basis, add capitalized acquisition costs and improvements, then subtract depreciation allowed or allowable and other required decreases. Selling costs are handled separately when calculating the amount realized. The result helps determine realized gain before a sale or 1031 exchange.
- [1031 Exchange Related Party Rules and the Two-Year Holding Period](https://1031dstinvestment.org/articles/1031-exchange-related-party-rules-and-the-two-year-holding-period/): The 1031 exchange related party rules do not ban exchanges between relatives or commonly controlled entities. They do impose a two-year holding requirement on many direct related-party exchanges and deny transactions structured to sidestep that rule. The most important distinction is the direction of the deal: buying replacement property from a related person who receives cash is usually far more problematic than selling relinquished property to a related buyer and acquiring replacement property from an unrelated seller.
- [Can an LLC Complete a 1031 Exchange?](https://1031dstinvestment.org/articles/1031-exchange-llc-same-taxpayer-rule/): Yes, an LLC can complete a 1031 exchange when the transaction preserves the same federal taxpayer and satisfies the other exchange requirements. In a 1031 exchange LLC structure, the decisive question is not simply whose name appears on each deed. It is how the LLC is classified for federal income tax purposes. A disregarded single-member LLC can provide title flexibility, while a multi-member LLC generally must complete the exchange at the entity level.
- [1031 Exchange Depreciation Recapture](https://1031dstinvestment.org/articles/1031-exchange-depreciation-recapture/): 1031 exchange depreciation recapture is generally deferred in a qualifying building-to-building exchange when no gain is recognized and the replacement property contains enough property of the applicable recapture class. The prior depreciation does not disappear. It reduced the relinquished property's adjusted basis, which usually creates more realized gain and a lower basis in the replacement property. Tax can become current because of boot, an exchange failure, a later taxable sale, or a special recapture rule that is not fully protected by the replacement assets.
- [Drop and Swap 1031 Exchange Rules](https://1031dstinvestment.org/articles/drop-and-swap-1031-exchange/): A drop and swap 1031 exchange may let partners pursue different outcomes when a partnership owns investment real estate. Before the sale, the partnership distributes undivided tenant-in-common interests to its partners. Each new co-owner then sells that direct real estate interest and may complete a separate Section 1031 exchange. The structure is not an automatic safe harbor. Taxpayer identity, investment intent, partnership distribution rules, debt, sale timing, and documentation must all support the planned treatment.
- [What is Boot in a 1031 Exchange?](https://1031dstinvestment.org/articles/1031-exchange-boot/): 1031 exchange boot is money, non-like-kind property, or net debt relief received in an otherwise qualifying exchange. Boot does not automatically invalidate the whole exchange. Instead, gain is generally recognized up to the smaller of the realized gain or the boot received. The remaining qualifying gain may still be deferred.
- [Should I Sell My Rental Property? Five Exit Paths](https://1031dstinvestment.org/articles/should-i-sell-my-rental-property/): If you are asking, “should I sell my rental property?” the best answer depends on what you need the exit to accomplish. A taxable sale offers cash and a clean break. A 1031 exchange may defer gain while keeping you in real estate. A DST may remove property management, an installment sale may spread some gain over time, and holding the property with professional management may preserve an estate-planning option. Compare all five before you list, because several choices must be arranged before closing.
- [How Sections 121 and 1031 Apply to Homes and Rental Property](https://1031dstinvestment.org/articles/1031-exchange-primary-residence/): The key point in any 1031 exchange primary residence analysis is that a home used solely for personal purposes does not qualify under Section 1031. Section 1031 applies only to real property held for investment or productive use in a trade or business. Section 121 is the rule that may exclude gain on a qualifying home sale. When a property has both personal and investment use, or its use changes over time, the two sections may apply to different portions of the gain under carefully documented circumstances.
- [How the 1031 Exchange 180 Day Rule Affects Late-Year Sales](https://1031dstinvestment.org/articles/late-year-property-sales-180-day-window/): A deferred 1031 exchange is often described as giving an investor 180 days to acquire replacement property. The 1031 exchange 180 day rule is more restrictive than that shorthand suggests. The exchange period ends on the earlier of day 180 or the due date of the federal income tax return for the year in which the relinquished property was transferred, including a valid extension.
- [Pre-Closing 1031 Exchange Checklist for the 45-Day Clock](https://1031dstinvestment.org/articles/pre-closing-1031-exchange-checklist-for-45-day-clock/): Good 1031 exchange planning changes what happens when the relinquished property closes. The QI is already engaged. The money has a controlled path. Advisors have the documents they need. Replacement criteria are defined. Financing conversations are underway. Primary and backup candidates have been screened. The identification form is familiar.
- [From Active Landlord to Passive Real Estate Investing](https://1031dstinvestment.org/articles/from-active-landlord-to-passive-real-estate-investor/): Passive real estate investing can let a landlord reduce or eliminate daily property duties without necessarily leaving real estate. The main paths are hiring a property manager, exchanging into another professionally managed property, buying a net lease property, using a qualifying Delaware statutory trust, or selling and moving outside real estate. Each choice changes control, liquidity, risk, and potential Section 1031 treatment.
- [A Practical 1031 Exchange Checklist for CPAs](https://1031dstinvestment.org/articles/practical-1031-exchange-checklist-for-cpas/): This 1031 exchange checklist gives CPAs, tax advisors, financial professionals, and wealth managers a practical framework for the early conversation, while there is still time to coordinate with the client’s qualified intermediary, attorney, real estate professionals, and replacement property advisor.
- [Seven DST Prohibitions Under Revenue Ruling 2004-86](https://1031dstinvestment.org/articles/seven-dst-prohibitions-explained/): Revenue Ruling 2004-86 describes a Delaware statutory trust whose governing agreement sharply limits the trustee's powers. The real estate industry commonly groups those limits into seven DST prohibitions covering new capital, debt, leases, property modifications, sale proceeds, cash distributions, and reserve investments.
- [Can You 1031 Exchange Into a REIT?](https://1031dstinvestment.org/articles/dst-vs-reit-vs-direct-real-estate-1031/): Can you 1031 exchange into a REIT? No. REIT shares are stock, not qualifying replacement real property under Section 1031. A direct purchase of qualifying investment real estate can be replacement property, and an interest in a properly structured Delaware statutory trust can also qualify under Revenue Ruling 2004-86 if the other exchange requirements are met.
- [How the DST 1031 Exchange Process Works in Seven Steps](https://1031dstinvestment.org/articles/how-1031-exchange-into-dst-works/): The DST 1031 exchange process should begin before the relinquished property closes. Starting early, often 60 to 90 days before the expected sale closing, provides time to select a qualified intermediary, confirm taxpayer identity, estimate equity and liabilities, compare current DST offerings, and coordinate with the investor’s CPA and attorney.
- [Capital Gains Tax on Real Estate in 2026](https://1031dstinvestment.org/articles/capital-gains-tax-on-real-estate-2026/): Capital gains tax on real estate sold in 2026 is based on taxable gain, not the sale price or the cash left after paying the mortgage. For investment property, long-term gain may fall into the 0%, 15%, or 20% federal rate bands. Gain attributable to depreciation may be taxed at a maximum 25% rate, the 3.8% net investment income tax may apply, and one or more states may also tax the sale. A principal residence can follow different rules, including a possible Section 121 exclusion. The actual bill depends on basis, selling costs, income, holding period, depreciation, property use, and state rules.
- [1031 Exchange Timeline for 45-Day and 180-Day Deadlines](https://1031dstinvestment.org/articles/1031-exchange-timeline-45-180-day-deadlines/): A 1031 exchange timeline has two simultaneous deadlines. The identification period ends at midnight on the 45th day after you transfer the relinquished property. The exchange period ends at midnight on the earlier of the 180th day after that transfer or the due date of your federal income tax return for the transfer year, including extensions. The transfer date is commonly labeled Day 0, and the following calendar day is Day 1. Weekends and holidays count.

## Pages
- [Adjusted Basis Rental Property Calculator](https://1031dstinvestment.org/calculators/adjusted-basis-rental-property-calculator/)
- [1031 Exchange Identification Rules Calculator](https://1031dstinvestment.org/calculators/1031-exchange-identification-rules-calculator/)
- [DST vs Direct Rental Property Calculator](https://1031dstinvestment.org/calculators/dst-vs-direct-rental-property-calculator/)
- [DST Portfolio Income & Allocation Calculator](https://1031dstinvestment.org/calculators/dst-portfolio-income-allocation-calculator/)
- [Calculators](https://1031dstinvestment.org/calculators/)
- [1031 Exchange Boot Calculator](https://1031dstinvestment.org/calculators/1031-exchange-boot-calculator/)
- [1031 Exchange Deadline Calculator](https://1031dstinvestment.org/calculators/1031-exchange-deadline-calculator/)
- [DST 1031 Calculator](https://1031dstinvestment.org/calculators/dst-1031-calculator/)
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- [Rules & Deadlines](https://1031dstinvestment.org/1031-exchange/rules-deadlines/)
- [1031 into a DST](https://1031dstinvestment.org/1031-exchange/1031-into-a-dst/)
- [Eligibility](https://1031dstinvestment.org/dst/eligibility/)
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