- 401(k) Loan
- 401(k) Plan
- 403(b) Plan
- 1031 Exchange
- 1035 Exchange
- Account Balance
- Accredited Investor
- Adjustable-Rate Mortgage (ARM)
- Adjusted Gross Income (AGI)
- After-Tax Return
- Aggressive Growth Fund
- Alpha
- Alternative Assets
- Alternative Minimum Tax (AMT)
- Alternative Security Investment
- Annual Percentage Rate (APR)
- Annual Report
- Annuity
- Appraisal
- Asset
- Asset Allocation
- Asset Class
- Audit
- Automatic Reinvestment
- Balanced Mutual Fund
- Bear Market
- Beneficiary
- Beta
- Blue Chip Stock
- Bond
- Book Value
- Boot
- Bull Market
- Buy-and-Hold
- Buy-Sell Agreement
- Capital Gain or Loss
- Cash Alternatives
- Cash Surrender Value
- Certificate of Deposit (CD)
- Charitable Lead Trust
- Charitable Remainder Trust
- Claim
- COBRA
- Coinsurance or Co-Payment
- Collateralized Loan Obligation
- Commercial Paper
- Common Stock
- Community Property
- Compound Interest
- Consumer Price Index (CPI)
- Convertible Term Insurance
- Corporate Bond
- Corporation
- Cost Segregation
- Coverdell Education Savings Account (Coverdell ESA)
- Credit Score
- Debt
- Debt-to-Equity Ratio
- Deduction
- Deed
- Deferred Annuity
- Defined Benefit Plan
- Defined Contribution Plan
- Deflation
- Delaware Statutory Trust
- Dependent
- Direct Rollover
- Disability Income Insurance
- Discount for Lack of Control
- Discount for Lack of Marketability
- Diversification
- Diversify
- Dividend
- Dollar-Cost Averaging
- Dow Jones Industrial Average (DJIA)
- Early Withdrawal
- Employee Retirement Income Security Act (ERISA)
- Employee Stock Ownership Plan (ESOP)
- Employer-Sponsored Retirement Plan
- Equity
- Estate Management
- Estate Tax
- Exchange-Traded Funds (ETFs)
- ExchangeRight Real Estate
- Executive Bonus Plan
- Executor
- Fair Market Value (FMV)
- Federal Income Tax Bracket
- Federal Reserve System (The Fed)
- Financial Aid
- Financial Industry Regulatory Authority (FINRA)
- Financial Statement
- First-to-Die Life Insurance
- Fixed Annuity
- Fixed-Rate Mortgage
- Foreclosure
- Fractional Ownership
- Front-End Load
- Full-cycle
- Fundamental Analysis
- Gift
- Gift Tax
- Gross Monthly Income
- Group Life Insurance
- Health Savings Account (HSA)
- Home Equity
- Income
- Index
- Individual Retirement Account (IRA)
- Inflation
- Initial Public Offering (IPO)
- Interest Rate
- Internal Revenue Code
- IRC
- Intestate
- Investment Objective
- Irrevocable Trust
- Joint Tenancy
- Jointly Held Property
- Keogh Plan
- Key Employee
- Key Person Insurance
- Life Insurance
- like-kind
- Liquidity
- Living Trust
- Living Will
- Long-Term-Care Insurance
- Lump-Sum Distribution
- Management Fee
- Marital Deduction
- Market Risk
- Market Timing
- Maturity
- Medicaid
- Medicare
- Money Market Fund
- Municipal Bond
- Municipal Bond Fund
- Mutual Fund
- National Association of Securities Dealers Automated Quotations (NASDAQ)
- Net Asset Value
- Net Income
- Net Worth
- New York Stock Exchange (NYSE)
- Non-contributory Retirement Plan
- Non-qualified Plan
- Non-Recourse
- Old-Age, Survivors, and Disability Insurance (OASDI)
- Opportunity Zone
- Partnership
- Pass-Through Entity
- Passive ownership
- Permanent Life Insurance
- Policy Loan
- Policy Rider
- Policyholder
- Policyholder
- Portfolio
- Power of Attorney
- Preferred Stock
- Prenuptial Agreement
- Price/Earnings Ratio (P/E Ratio)
- Prime Interest Rate
- Principal
- Probate
- Profit-Sharing Plan
- Property
- Prospectus
- Qualified Retirement Funds
- Qualified Retirement Plan
- Rate of Return
- Real Estate Investment Trust (REIT)
- Recourse Loan
- Redemption
- Replacement property
- Required Minimum Distribution (RMD)
- Revenue
- Revocable Trust
- Risk
- Risk Tolerance
- Rollover
- Roth IRA
- Roth IRA Conversion
- Savings Incentive Match Plan for Employees (SIMPLE)
- Securities and Exchange Commission (SEC)
- Securitized Real Estate
- Self-Directed IRA
- Share
- Split-Dollar Life Insurance
- Split-Dollar Plan
- Sponsor
- Spousal IRA
- Standard & Poor’s 500 Index (S&P 500)
- Stock
- Stock Certificate
- Stock Purchase Plan
- Stock Split
- Tax Credit
- Tax Deduction
- Tax-deferral
- Tax Deferred
- Tax-Exempt Bonds
- Taxable Income
- Technical Analysis
- Tenancy in Common
- Term Insurance
- Testamentary Trust
- Time Horizon
- Title
- Total Return
- Traditional IRA
- Treasuries
- Trust
- Trustee
- Trustee-to-Trustee Transfer
- Uniform Gift to Minors Act (UGMA)
- Universal Life Insurance
- Unlimited Marital Deduction
- UPREIT
- Variable Interest Rate
- Variable Universal Life Insurance
- Volatility
- Whole Life Insurance
- Will
- Withholding
- Yield
- Zero-Coupon Bond
Approximately 75% of DST (Delaware Statutory Trust) offerings conduct cost segregation studies.
DSTs are structured as pass-through entities for tax purposes, meaning rental income, expenses, and depreciation deductions flow directly to investors (typically reported via a grantor trust letter rather than a K-1). This allows investors to claim their pro rata share of depreciation on their personal tax returns, enhancing tax efficiency—especially when paired with strategies such as 1031 exchanges for capital gains deferral.
Cost segregation is a common enhancement in this setup. It involves a study (usually performed or commissioned by the DST sponsor) that reclassifies portions of the property’s basis into shorter recovery periods—such as 5-year personal property (e.g., carpets, fixtures) or 15-year land improvements (e.g., landscaping, parking)—instead of the standard 27.5-year (residential) or 39-year (commercial) straight-line depreciation. This accelerates deductions in the early years of ownership, reducing taxable income and improving cash flow without changing the total depreciation over the asset’s life.
Not every DST sponsor provides or incorporates a cost segregation study (some offerings rely on simpler allocations), but industry sources indicate it has become best practice for the majority of DSTs across multifamily, industrial, retail, and similar property types. Investors in these offerings benefit from the sponsor-supplied breakdown for tax reporting purposes. In rarer cases where a study isn’t provided upfront, an investor might pursue one independently (subject to the DST structure and sponsor approval), but sponsor-led studies are the norm for those that “allow” or facilitate it.
Keep in mind that tax outcomes depend on individual circumstances, property type, and current IRS rules (e.g., bonus depreciation eligibility). Always consult a tax advisor or CPA familiar with DSTs for your specific situation, as the exact benefits vary by offering.
