DST converting to 721 UPReit Depreciation question

[Steve Schaeffer]

I participate in a DST acquired thru a 1031 Exchange. the DST wants to transition into a 721 Upreit. What happens to my carry forward depreciation. I have had several previous 1031 exchanges that still have a lot of depreciation. After Each Exchange I have carried forward the leftover depreciation to the next property. Can I continue to take depreciation on my carry forward if go into the UPREIT?

[Dave Foster]

@Steve Schaeffer, Like @Jon Taylor said, the depreciation (via the basis) will be carried forward into the REIT. But once you've converted into the REIT you now own an equity and not real estate. Any time you sell a share of the REIT you will be paying tax on all deferred gain and the depreciation. That's the down side to the 721. REITS are generally not something that folks stay in forever. So the probability of paying the tax you've worked so hard to defer over the years is pretty high with this conversion. There ought to be a way to sell your interests and 1031 into a different DST or back into bricks and mortar. You may have to ask. @Jon Taylor, might that be a viable option?