Your 1031 Exchange Has An Expiration Date. Your options don't have to.
A 1031 exchange keeps your capital gains tax deferred only as long as you keep exchanging. The Deferred Sales Trust lets you finally sell — and still defer capital gains tax and depreciation recapture — while putting your full pre-tax proceeds to work far more flexibly than another building ever could.
The Wall At The End Of The Exchange
You built real equity the right way — buying great properties, improving them, and rolling the gains forward. The 1031 exchange did its job. It kept your capital working in the next property, and then the next.
But a 1031 only defers your gain while you keep exchanging. The moment you want to truly cash out, simplify, retire, or move your money anywhere other than real estate, the deferred tax comes due — all of it, all at once.
Capital Gains
Recapture
Income Tax
State Tax
Stacked together, 25–35%+ of your gain can disappear at the closing table — on property you spent a lifetime building.
Keep Exchanging — Or Finally Step Through
Most owners believe they only have two choices: keep trading into another building forever, or sell and write an enormous check to the IRS.
There is a third door. A strategy that lets you sell your property, keep the capital gains tax deferred, and reinvest your full pre-tax proceeds into a diversified portfolio built for income — not another set of keys, tenants, and toilets.
See How It WorksThe Deferred Sales Trust
Not to be confused with the Delaware Statutory Trust used inside 1031 exchanges, the Deferred Sales Trust (DST) does exactly what its name implies. It defers the capital gains tax on the sale of your property, lets you customize your income going forward, and keeps your proceeds invested on a tax-deferred basis.
It is built on the installment sale provisions of IRC §453 — long-established federal tax law, not a loophole.
You Sell
You sell your appreciated property to a third-party trust in exchange for a secured installment note.
Trust Closes
The trust sells to your buyer for cash. That funds the note — it is not a taxable event to you.
Proceeds Invest
Your full pre-tax proceeds are reinvested in a diversified portfolio, which you help direct as a secured creditor.
You Draw Income
You receive payments on a schedule you design. Tax is owed only as those installments are received.
Outright Sale vs. 1031 Exchange vs. DST
Three ways to exit appreciated real estate — and what each one actually lets you do.
| Sell Outright | 1031 Exchange | Deferred Sales Trust | |
|---|---|---|---|
| Defers capital gains tax | No | Yes | Yes |
| Defers depreciation recapture | No | Yes | Yes |
| Lets you exit real estate entirely | Yes | No | Yes |
| Diversify beyond one asset class | Yes | No | Yes |
| 45 / 180-day deadline pressure | None | Strict | None |
| Must find replacement property | No | Required | Not required |
| Customize your income timing | No | No | Yes |
| Also works for business & stock sales | — | No | Yes |
| Installment note can be inherited | No | No | Yes |
The DST is frequently used as a rescue when a 1031 exchange is failing — when no suitable replacement property can be identified inside the 45-day window.
Elite Real Estate. Elite Tax Strategy.
Any brokerage can list your property. Hyleri & Marc Katzenberg and the Luxe Latitudes team bring something very few real estate groups can: a formal strategic partnership that puts a sophisticated capital gains deferral strategy on the table before you ever sign a listing agreement.
Luxe Latitudes — Team of Compass
Led by Hyleri Katzenberg (Team Leader, licensed in CT & FL) and Marc Katzenberg. Top 1.5% in the nation, $4B+ in sales volume and 450+ closings across Greenwich, Westport, Fairfield County and South Florida.
Davenport & Associates, Inc.
A wealth planning firm in Norwalk, CT specializing in strategies to reduce estate, income and capital gains taxes. Founded in 1997 and led by President John Davenport, a licensed estate and tax attorney in New York and Connecticut.
Guardian DST & Tax Counsel
Kent LeFevre, National DST Trustee at Guardian DST Services, structures and administers the trust. Todd Jackson, Esq. — 32 years and $30B+ in completed transactions — provides the legal work and audit defense for the life of every trust.
The World's Largest Residential Brokerage
Following its acquisition of Anywhere Real Estate — completed January 2026 — Compass now operates as the largest residential real estate brokerage in the world, with roughly 340,000 agents across some 120 countries and territories. Luxe Latitudes sits under that umbrella, alongside:
Don't Just Die With It
Most retirees hold highly appreciated assets — real estate, stock, a business — until death, so heirs receive a step-up in basis and owe nothing in capital gains tax on a later sale.
That's excellent for the heirs. It does nothing for you.
Davenport & Associates takes a different approach to wealth planning: helping clients use their assets more effectively in retirement, for both income and wealth transfer. The DST is one of those strategies — a way to sell a primary residence, commercial building, or investment property, defer the capital gains tax, generate income on your own schedule, and still leave an installment note your family can inherit.
The Capital Gains Estimator
Sound too good to be true? It isn't. Find out whether the DST strategy can work for you. Tell us when you bought the property, what it's worth today, and any depreciation you've taken — we'll estimate your capital gains exposure and tell you immediately whether you're a strong candidate.
Estimate Your Capital Gains Tax
Answer the questions below and we'll show you what you could owe — and whether you qualify to defer it.
What are you selling?
What did you pay for it?
What's it worth today?
Where should we send your estimate?
How we got there
Estimated tax you'd owe
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Schedule Your Consultation
Deferred Sales Trust FAQ
Is the Deferred Sales Trust legal?
Yes. The DST is built on the installment sale provisions of IRC §453 — long-established federal tax law. The structure has been examined by the IRS on multiple occasions (2006, 2008 and 2019) and found compliant when properly implemented, and audit defense is provided for the life of each trust.
How is a DST different from a 1031 exchange?
A 1031 exchange defers tax only if you roll real estate into more like-kind real estate within strict 45- and 180-day deadlines. A Deferred Sales Trust lets you exit real estate entirely, diversify into a managed portfolio, and design your own income schedule — with no replacement-property requirement. It also works for business and stock sales, which a 1031 cannot do.
Is this the same as a Delaware Statutory Trust?
No — and this is the most common point of confusion, because both are abbreviated "DST." A Delaware Statutory Trust is a fractional real estate ownership vehicle used inside a 1031 exchange, so you remain invested in real estate. A Deferred Sales Trust is an installment sale structure under IRC §453 that lets you leave real estate altogether while deferring the tax.
What about depreciation recapture on my rental property?
Depreciation recapture — taxed federally at up to 25% — is one of the largest hidden costs when selling a long-held rental or commercial property. Because the DST defers recognition of the gain, the recapture is deferred along with it. Our Capital Gains Estimator factors depreciation in directly.
Does a DST eliminate my capital gains tax?
No — and be cautious of anyone who promises that. A Deferred Sales Trust is a deferral strategy. Tax is postponed and paid over time as you receive installment payments; it is not avoided or eliminated. Deferral, used well, can be powerful — but it is not avoidance.
Can this rescue a 1031 exchange that's about to fail?
Frequently, yes. If your 45-day identification window is running out and no suitable replacement property can be found, a DST can often be used so the exchange doesn't collapse into a fully taxable sale. Timing matters enormously here — reach out as early as possible.
What size gain makes this worth considering?
The strategy is designed for meaningful taxable events — generally $100,000+ in expected capital gains tax or $500,000+ in total capital gains. The Capital Gains Estimator will tell you immediately where you land. If you fall below that threshold, we have other tax offset strategies that may still reduce your bill.
Know Your Number First
The worst time to learn what you owe is at the closing table. Take two minutes, run the estimate, and find out whether you're a strong candidate to defer it.
Start The Capital Gains Estimator