The 1031 “like-kind” exchange is a tool that allows a real estate holder to defer capital gains (and recapture) taxes on the sale of a property when those proceeds are subsequently invested in another like-kind property.

1031 refers to the IRS code that spells out the law and specific requirements regarding such “like-kind” transactions. The IRS is taking the view that any investment proceeds that are rolled (exchanged) into another “like-kind” investment within a certain time frame, are not actually recognizing a “gain” (profit) which would be subject to capital gains taxes.


In addition to deferring capital gains, the 1031 exchange may also allow the seller of a property to defer depreciation recapture taxes.


Meet Your 45 Day Tax-Deferred Exchange Replacement Requirements









While the use of the 1031 has been a staple for investors for some time, the use of the Delaware Statutory Trust provides investors with greater flexibility in terms of real estate investment choices for those that would like to use the 1031 exchange.

From the perspective of an individual investor, perhaps the biggest benefit of the DST structure is that it allows a fractional interest in real estate interests to qualify as a like kind property for exchange purposes. In turn, this opens up a number investment possibilities that may not have been available to the investor. An investor who owned and managed  residential properties for example may roll the proceeds from the sale of that property, into a new healthcare 1031 class such as senior care through the purchase of a fractional investment.

Not only does the DST open up new sectors that may not have been available, but the structure will allow an investor to become a passive investor, and not have to worry about the day to day issues of real estate management.

While it is always possible to hire someone to manage your properties as an individual investor, when you invest as part of a DST, the management the trust will be fully handled by the sponsor and their team. This also applies to the work and analysis done by professionals associated with the trust regarding investment and financing decisions.


How does a Delaware Statutory Trust Work?


Generally speaking a sponsor will set up the DST and name trustee(s) who will have sole authority to manage the business and assets of the trust. The trustees will have a fiduciary responsibility to the beneficial owners (i.e. fractional owners).


The trust will collect the investment money, arrange any financing necessary on behalf of the trust, and make and manage or hire property managers. The trust itself holds direct ownership of the assets with the individual owners owning an interest (or share) in the trust.


Similar to an LLC all income and distributions are passed through and taxed to the individual owners. The typical life of a trust can vary greatly but could easily be five to ten years in which property is acquired, income collected and distributed to owners and when, upon disposition of assets, remaining capital is returned to investors.











The senior care sector consists of long-term care facilities such as memory care, transition care, assisted living, and senior living are all particularly proving their resilience coming out of the pandemic.


The rate at which American Seniors are retiring is truly staggering. The number of Americans 65 and older will increase from 56 million in 2020 to 79.2 million by 2035, due to the emergence of Baby Boomers into the age of retirement. Such a vast increase only creates a greater demand for Senior Living Facilities.  As the elderly population grows, the rate of senior housing new construction is not keeping pace. When these two dynamics are combined, the need that is left unaddressed is the growing market for newer and better facilities/communities tailored to emerging senior care needs.


The senior care sector has long been dominated by institutional investors. The sector has been traditionally difficult for 1031 Tax-Deferred Exchange Investors to enter due to the complexity of operator structures. To overcome this some scenario care sponsors are offering opportunities for fractional ownership via a Delaware Statutory Trust (DST) structure. This allows for 1031 exchange investors to participate in the sector while leveraging the sponsor’s operations team.

Senior Living Fractional Ownership | Delaware Statutory Trust 

A Delaware Statutory Trust (“DST”) is a legal structure that can be used to hold commercial real estate assets. The DST structure establishes a trust under Delaware law that holds 100% fee-simple of the underlying commercial real estate assets. Investors invest directly into the Trust, holding beneficial interests or “shares” of the Trust. The DST ownership structure allows for multiple investors to own beneficial interests and provides investors with flexibility and other benefits over traditional ownership.
 SLF 1031, LLC  is a DST Sponsor, meaning SLF identifies an investment opportunity, performs all due diligence, arranges financing, and closes on the asset before making it available to accredited investors. As a Sponsor, SLF 1031 provides investors with quality “pre-packaged” investment opportunities in the senior care subsector.  Senior Care with its operational intensive management in particular offers investors benefits to leverage a highly experienced team in a fractional investment structure.
• Quality and Scale of Asset 
• Passive CRE Investment 
• Flexibility of Ownership 
• Qualifies for 1031 Tax-Deferred Exchange 
• Pre-Arranged and Non-Recourse Financing 
Professional Management 
• Limited Personal Liability 
• Lower Minimum Investment 
• Flexible Estate Planning Tool 
• Portfolio or Investment Diversification
• Defined Exit Strategy 
• Sponsor Track Record

Healthcare Net Lease Direct Ownership custom acquisition solutions and buyer representation are exclusively provided by Investment Grade Income Property, LP dba &

Healthcare1031 does not offer legal or tax advice. Tax topics discussed are for educational purposes only and should not be considered professional tax advice. It’s recommended that you discuss your situation with your tax or legal advisor

Senior Living Fractional Ownership & DST solutions are offered exclusively direct by the sponsor SLF 1031, LLC.

The purpose of this webpage is to provide general information about senior housing, the senior housing 1031 market ; it is not intended as either an offer to sell or solicitation of an offer to buy securities in SLF1031, LLC.