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Delaware Statutory Trust (DST)

Client exchanged rental property for another rental property and a property held in a Delaware Statutory Trust (DST) in 2021. My job is to record everything on the books so I may prepare the partnership tax return.

As I read the documents, Property L sold for $559. At closing $246 of debt was paid off. Property G was purchased for $165 with no debt. Client put $5 into the closing on Property G. Property D was purchased for $223 plus assumption of $224 debt.

I think that gives me boot on exchange of (246 - 5 - 224) = 17. Agree?

DST annual statement includes a paragraph that Buyer agrees to contribute an additional $250 for repairs to be completed after closing. I don't have that document, but I have no reason to believe this was in error. My analysis is this contribution to the DST would be either repairs or capitalized at the time it is made, and has nothing to do with the purchase. Agree?

Other than "strange" reporting, I treat the DST as a titling issue, and report as I would all other properties (including depreciation) - Rent Income, Rent Expenses, etc.

Since loan on Property L was paid off, I write off the unamortized balance of loan fees on original loan. Agree?

Reply to
bc
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It has been a long time since I fiddled with this sort of thing, but this calculator may be of help:

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But:

$559-$246=$313 "cash" from the relinquished property.

$165+$223=$388 "cash" used to purchase the replacement properties.

You only mention the client putting in $5 toward replacement property G. This doesn't add up. Did client put in cash toward replacement property D?

Reply to
Taxed and Spent

This is why I always have to slow-walk multiple property exchanges.

The settlement sheet for the purchase of Property G doesn't add up. It has a note at the bottom "Total Amount Due From Buyer $89k". After you get done with all the miscellaneous charges, I think this plugs the hole. Client tells me this came from another loan which was paid off in 2022.

Reply to
bc

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