Q: Before my mom passed away she invested in a 1031 exchange for tax reasons. Is there any way to cash it out?
its called a Zero Coupon VIII DST and has something to do with CVS pharmacies.
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A:
When dealing with a Zero Coupon VIII DST (Delaware Statutory Trust) investment, especially after a loved one’s passing, cashing it out can be complicated. A 1031 exchange is a tax-deferred strategy, meaning if you cash it out now, you might face significant capital gains taxes on any appreciation. This investment likely involves properties leased to CVS pharmacies, and selling your interest in the DST typically requires either finding a buyer or waiting for the trust to sell the properties.
It’s important to look into the trust’s agreements to understand any restrictions or timelines on selling your share. Some DSTs are structured in such a way that investors must hold onto their interests until the properties are sold, which can take several years. However, in some cases, there may be a secondary market for selling DST interests, although this could come with its own challenges, such as finding a buyer and potentially selling at a discount.
You should review the trust documents carefully to understand your options and any tax implications. Considering the potential tax consequences, make sure you fully understand what the sale or exchange would mean for your financial situation. You might want to explore other options, such as a partial 1031 exchange or other strategies that align with your financial goals.
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