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Updated about 1 month ago on . Most recent reply presented by

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DST converting to 721 UPReit Depreciation question

Steve Schaeffer
Posted

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?

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Jon Taylor
  • Pasadena, CA
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Jon Taylor
  • Pasadena, CA
Replied

Your current cost basis should carry forward and continue on your REIT OP investment. Meaning, your depreciation schedule should continue.

Do you have an *option* or are you *forced* to participate in the REIT? Does the REIT pay its cash dividend out of operating cash flow (AFFO), or is it paying its dividend out of paid-in capital?

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