Being a landlord is a job you didn't mean to take. Your Campbell rental's equity doesn't have to keep employing you — a 1031 exchange moves it, tax-deferred, into real estate that doesn't call at midnight.
Section 1031 of the tax code lets you sell investment property and reinvest the proceeds in like-kind investment property while deferring capital-gains tax — federal and California — that would otherwise come due at sale. On a long-held Campbell rental, that deferral routinely keeps six figures working for you instead of leaving in April.
A DST is fractional ownership of institutional real estate — apartment communities, medical, industrial — that qualifies as 1031 replacement property. No tenants, no toilets, no 2am calls: distributions arrive, management is professional, and the deferral holds. It's how many long-time landlords finally retire from landlording without triggering the tax.
A qualified intermediary (QI) must be engaged before closing — proceeds can never touch your hands, or the exchange dies.
Occupied or vacant — the tenant playbook and this one work together. Proceeds go straight to the QI.
Name the replacement property (or DST) in writing under the identification rules.
The QI funds the purchase; the gain rides forward, deferred in full.
Start with the two numbers that drive everything: what your Campbell rental would sell for today, and what the deferred tax is worth to you. Private, no obligation.
Direct to Tim McMullen, CA DRE #02016832. No listing required, no obligation, no spam.
This guide is general information, not tax or investment advice. 1031 exchanges have strict rules and deadlines; DSTs are securities offered through licensed channels and involve risk. Engage a qualified intermediary and consult your CPA before acting.