What is a Delaware Statutory Trust?
A Delaware Statutory Trust (DST) is a legally well-defined and secure entity created by the Delaware Statutory Trust Act in 2002. These trusts are designed to hold income producing properties and deliver pro-rata benefits to investors.
The income producing property is held as securitized real estate and Individuals can purchase incremental shares of a DST. These individuals are called trustees. The trustees, also called beneficiaries, hold individual beneficial interests in the trust and receive distributions according to their pro-rata shares in the trust. Since the trust beneficiaries are separated from the trust, as a real estate investor in the trust, the beneficiary can only lose their original investment. They have no legal obligations to repay loans or be a party in a law suite against the property. Trustees benefits include income, depreciation, and appreciation. DSTs typically pay 3% -6% against the amount invested. DST depreciation can offset DST income taxes. It can offset up to 100% of the DST income tax in some cases.
Check the details for your specific investment to learn the depreciation percentage.