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DST 1031 Exchange · California QI

California DST 1031 Exchange

Exchange into a Delaware Statutory Trust holding institutional real estate. Passive ownership, no landlord obligations, monthly distributions. Closes in 48 hours under Rev. Rul. 2004-86.

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$799 flat fee Same-day setup $15M total insurance

$5M Fidelity Bond + $10M E&O Insurance

Segregated Escrow Accounts

IRS-Compliant Exchange Documentation

How a California DST Exchange Works

Three steps. The DST sponsor handles the property; Simple 1031 handles the §1031 mechanics; you collect distributions.

1

Identify DST Offerings

Within 45 days of your relinquished closing, identify one or more DST offerings. Your registered representative or RIA reviews suitability and selects the offering(s).

2

Subscribe Through Sponsor

Subscribe to the DST through the sponsor's broker-dealer. Simple 1031 wires exchange proceeds from segregated escrow directly to the DST escrow at closing.

3

Hold & Receive Distributions

You hold a beneficial interest in the trust. Monthly or quarterly distributions arrive on the sponsor's schedule. When the trust eventually sells, you can roll into another §1031 (including another DST).

Is a DST Exchange Right for You?

A short framework. Below that, links to the other three structures.

When It Fits

  • You want passive replacement without management responsibility
  • You are at or near retirement and want to step out of operating real estate
  • Your relinquished value fits typical DST minimums ($100K+)
  • You qualify as an accredited investor

When to Consider Another Structure

  • You want active control of replacement property — pick a forward exchange
  • You are not an accredited investor — DST suitability rules apply
  • Your relinquished value is below typical DST minimums

Other California Exchange Structures

Forward Exchange

$799

Reverse Exchange

$1,500

Improvement Exchange

$1,500

California-Specific Considerations

How California treatment intersects with this dst exchange. Tax topics for your CPA — Simple 1031 handles QI mechanics only.

California Conforms to Federal 1031 Rules

California Revenue & Taxation Code Section 17024.5 generally conforms to IRC Section 1031 for like-kind exchanges of real property held for investment or business use. Federal 1031 rules — the 45/180-day deadlines, the like-kind requirement, the Qualified Intermediary requirement — all apply to California property.

The California Clawback (R&TC §§18032 & 24953)

When California property is exchanged into out-of-state replacement property, California does not permanently give up its taxing jurisdiction over the originally deferred gain. When the out-of-state replacement is eventually sold in a non-1031 transaction, California taxes that original California-sourced gain — even if the taxpayer has since moved out of state. Taxpayers with California-sourced deferred gain must file Franchise Tax Board Form 3840 annually to track the deferral. Simple 1031 is not a tax advisor and does not prepare Form 3840 — work with a California CPA familiar with the clawback before structuring your exchange.

Cross-State Exchanges Are Common

California investors frequently exchange into Nevada, Texas, Florida, and Arizona replacement property to simplify portfolio management or reduce ongoing state-tax exposure on rental income. These exchanges are fully federal-compliant and geographically like-kind. The California clawback still applies to the deferred gain — your CPA can model the long-term state tax picture.

Scope note: Simple 1031 LLC is a Qualified Intermediary. We do not provide tax, legal, or investment advice. Work with a qualified California CPA for state filings and tax planning, and a real estate attorney for legal questions.

California DST Exchange Pricing

Flat fee. Same in California as anywhere. No hidden charges, no state surcharges.

Flat Fee. No Surprises.

California DST Exchange

Passive replacement — DST beneficial interest under Rev. Rul. 2004-86

$799 /exchange
  • QI mechanics for the §1031 portion of the transaction
  • Segregated escrow for exchange proceeds
  • Coordination with the DST sponsor's broker-dealer
  • 45/180-day deadline tracking
  • Dedicated exchange coordinator
  • IRS-compliant exchange documentation
  • $5M Fidelity Bond + $10M E&O Insurance
Get Started

Fee deducted from exchange proceeds after your California property closes. Nothing out of pocket to start.

California DST Exchange Questions

If you do not find your answer here, call us at (725) 224-5008.

Yes. DSTs qualify as like-kind replacement property under Rev. Rul. 2004-86 and are routinely used by California investors stepping out of active management. Suitability is determined by the placing broker-dealer; Simple 1031 handles the §1031 mechanics.
Yes. If the DST holds out-of-state real property (most do), California's R&TC §§18032 and 24953 clawback applies to the original California-sourced gain when the DST eventually sells. FTB Form 3840 is filed annually by your CPA. Simple 1031 does not prepare Form 3840.
Most DST minimums start around $100,000. If your relinquished California gain is smaller, your registered representative can advise on suitability or alternative structures.
No. Under Treasury Regulation §1.1031(k)-1(k), a party you have had a working relationship with in the prior two years — including your attorney or CPA — is a disqualified person and cannot hold exchange proceeds. The IRS requires an independent Qualified Intermediary.
Your exchange proceeds are held in segregated escrow — never commingled with operating funds or other clients' exchanges. Simple 1031 carries a $5M Fidelity Bond and $10M Errors & Omissions Insurance, and our escrow accounts use FDIC-insured banking partners.
Simple 1031 charges a flat $799 for the DST exchange. Same flat fee in California as anywhere else — no state surcharge, no hourly billing. Fee deducted from exchange proceeds after closing.
No. Simple 1031 is a Qualified Intermediary, not a tax advisor. Your CPA prepares Form 8824 and any state-specific filings. We provide the exchange documentation your CPA needs.

Start Your California DST Exchange

Tell us about your California property. We will respond within one business day.

Your information stays confidential. We respond within one business day. Or call now: (725) 224-5008.

Ready to Start Your California DST Exchange?

Engage Simple 1031 before you close. Flat $799 fee. Nothing out of pocket to start.

Start Your Exchange Call (725) 224-5008