Four views of how deferring your sale proceeds through a Delaware Statutory Trust and 721 Exchange may benefit you over time. Enter your property details, then explore each tab.†
Notes & Disclosures
- Cost Basis. Your original purchase price plus the cost of any capital improvements made during ownership. Does not include transaction costs unless capitalized.
- Depreciation Taken. Cumulative depreciation deductions claimed on the property during ownership. Reduces your adjusted basis and is subject to recapture upon sale under IRC §1250.
- Net Sale Proceeds. Gross sale price less selling costs, commissions, and closing costs attributable to the seller. For a 1031 exchange to be fully tax-deferred, proceeds must be fully reinvested in like-kind replacement property.
- Section 1250 Recapture. Under IRC §1250, accumulated depreciation on real property is subject to federal recapture tax at a maximum rate of 25% (unrecaptured Section 1250 gain). If your marginal ordinary income tax rate is below 25%, the lower rate applies. State income taxes are not modeled in this calculator.
- Long-Term Capital Gain & LTCG Rate. The portion of total gain exceeding recaptured depreciation. Taxed at preferential long-term capital gains rates of 0%, 15%, or 20% depending on total taxable income, plus the 3.8% Net Investment Income Tax (NIIT) if applicable. NIIT applies to net investment income above $250,000 (married filing jointly) or $200,000 (single). The 18.8% and 23.8% buttons reflect the 15% and 20% base rates plus NIIT.
- Estate Planning Horizon. The number of years until the anticipated estate event. Under IRC §1014, a beneficiary inheriting REIT shares receives a stepped-up cost basis equal to fair market value at the date of death, potentially eliminating all deferred gain. This assumes the investor holds the REIT shares (not OP Units) at death. Consult estate planning counsel regarding your specific structure.
- Annual Distribution Yield. The estimated annual cash distribution as a percentage of invested value. DST and REIT distributions are typically taxable as ordinary income when received and are shown on a gross (pre-tax) basis here. Actual distributions are not guaranteed.
- Estimated Annual Growth. The assumed annual appreciation in the value of the invested asset. This is a hypothetical illustration only and does not represent or guarantee future performance. Actual results will vary.
- Other Taxable Income. Your total taxable income from all sources other than the property gain being analyzed — including wages, business income, interest, dividends, rental income, and any other items included in your taxable income. This figure is used to determine your marginal tax bracket, which in turn sets the rates applied to each gain component as they stack on top.
- Spread Years & Structured Exit. Assumes equal portions of total gain are recognized in each calendar year over the selected period. Real-world structured dispositions depend on the REIT's specific liquidity events and may not permit equal-portion timing. Return of basis is excluded from both the concentrated and spread scenarios, as it applies equally in each case. 12
- 2025 Tax Brackets. Rate thresholds reflect 2025 federal income tax parameters for ordinary income and long-term capital gains (MFJ and Single). Tax law is subject to change. Brackets are not adjusted for future inflation. The Structured Exit tab uses marginal rates applied to the top of each income tranche as a simplification; actual tax liability is determined by bracket stacking and may differ modestly.
- Upfront Program & Commission Costs. A 2.5% program fee is applied in all scenarios, reflecting estimated upfront organization, offering, and dealer manager costs inherent to DST structures regardless of distribution channel. The optional 7.5% brokerage commission reflects selling commissions common in broker-dealer distribution, bringing total upfront costs to approximately 10% when toggled on. Magnolia Private Wealth is a fee-only registered investment adviser (RIA) and does not charge selling commissions on DST investments; clients working with Magnolia are not subject to the brokerage commission reflected in that toggle. These figures are illustrative estimates; actual costs vary by sponsor and offering. Neither figure includes advisory fees, which vary by advisor and client arrangement. Investors should review the applicable offering documents for a complete fee schedule.
- Return of Basis. When REIT shares received through the 721 exchange are ultimately sold, a proportional share of the investor's carryover tax basis is returned tax-free. This benefit applies equally whether the investor sells in a single year or across multiple years and is therefore excluded from the Structured Exit comparison to isolate the rate-differential advantage.
Important Disclosures. This calculator is for illustrative and educational purposes only and does not constitute tax, legal, investment, or financial advice. All inputs and outputs are estimates based on simplified assumptions. Actual tax outcomes will vary based on individual circumstances, state and local income taxes, alternative minimum tax, phase-outs of deductions or credits, and other factors not modeled here. A DST/721 exchange involves illiquid investments, significant concentration risk during the DST phase, and no guarantee of income or appreciation. Investors must meet applicable suitability and accreditation standards. The IRC §1014 step-up in basis applies to assets included in a decedent's gross estate; proper planning is required to ensure REIT shares (not OP Units) are held at death and included in the estate. Past performance is not indicative of future results. Magnolia Private Wealth does not provide tax or legal advice. Please consult with your qualified tax advisor, estate planning attorney, and financial advisor before making any investment or tax planning decision.
