Inputs to organize
- Exchange equity
- Debt-replacement target
- Direct-property allocation
- DST candidates
- DST equity and allocated debt
- Liquidity reserve
What the calculator shows
- Allocation comparison
- Debt comparison
- Concentration flags
- Unallocated equity
- Offering-expiry warnings
How the worksheet moves from facts to an estimate
Enter exchange equity and the debt-replacement planning target from the closing and adviser worksheets.
Enter each direct property and DST candidate separately with equity, allocated debt, property type, geography, sponsor, and status.
Compare total planned equity and debt with the entered targets.
Flag concentration by sponsor, property, tenant, geography, asset type, and maturity where data is available.
Keep a separate liquidity reserve outside exchange allocation unless the adviser confirms different treatment.
Define the exchange equity before allocating it
Start with the qualified intermediary's expected exchange proceeds, not the property's gross sale price. Reconcile sale price, debt payoff, approved expenses, deposits, and any money expected outside the exchange. Unallocated exchange equity can create current recognition, so it should not be relabeled as a personal liquidity reserve.
The worksheet now displays a separate reserve from non-exchange funds. That distinction keeps personal liquidity planning from quietly reducing the amount shown as exchange equity available for replacement property.
Compare direct property and DST equity on one schedule
A mixed plan can allocate exchange equity between direct real estate and one or more DST interests. Enter each direct-property requirement, the proposed DST equity, and the allocated debt expected from current offerings. The combined schedule should reconcile to the intermediary's funds and the value and equity targets for the exchange.
Current DST availability can change quickly. Do not treat a preliminary list as a commitment or a closing guarantee. Confirm offering status, investor eligibility, subscription timing, and the qualified intermediary's funding requirements.
Understand what no day-to-day management means
A DST can remove the investor from tenant calls, maintenance decisions, leasing, renovations, and ordinary property management. The sponsor controls the trust and the real estate. That tradeoff can suit an owner leaving active management, but it also means reduced control over financing, operations, refinancing, sale timing, and distributions.
Compare that loss of control with the owner's actual reason for selling. Passive ownership is not automatically lower risk or more liquid.
Review the property, sponsor, fees, and leverage
Institutional-quality property does not eliminate property risk. Review location, tenants, leases, operating history, capital needs, market conditions, debt terms, reserves, and exit assumptions. Review the sponsor's experience, conflicts, affiliates, realized outcomes, impaired outcomes, and compliance organization.
Offering fees and ongoing compensation affect investor economics. Read the private placement memorandum, operating documents, financial information, subscription materials, and tax disclosures before funding. Projected income is not guaranteed.
Plan for illiquidity and investor eligibility
DST interests are generally private securities with transfer restrictions and limited liquidity. Minimum investments often begin around $100,000 but vary by offering. Eligibility, concentration, income needs, tax profile, loss capacity, hold period, estate plan, and access to outside liquidity all belong in the review.
Do not place emergency reserves or near-term spending needs into an illiquid replacement solely to complete the exchange. Separate non-exchange cash planning from exchange proceeds and document the distinction.
Request current opportunities with a usable brief
A productive property request includes exchange equity, debt-replacement target, identification deadline, desired income profile, property preferences, concentration limits, prior DST exposure, and the role the investment should play after closing. It should also state whether direct property remains under consideration.
Use the worksheet to organize those facts, then request the current property list and speak with the appropriately licensed professionals responsible for offering and suitability review. The calculator helps frame the allocation; current documents and transaction-specific advice control the decision.
A transparent estimate is stronger than a confident guess.
Keep the source for every input beside the calculation. Use the current contract, draft settlement statement, payoff, basis records, depreciation schedule, replacement-property facts, lender terms, and qualified-intermediary information. Mark incomplete numbers as estimates and update them when documents change. A calculator cannot see title, taxpayer identity, property use, related parties, funds flow, mixed use, asset character, disaster relief, or a closing instruction that changes the result.
Run a conservative scenario as well as the expected case. Lower sale proceeds, higher expenses, a different debt payoff, or a delayed replacement closing can expose a weak point before it becomes irreversible. Save the date and assumptions with the output. If the result changes materially from one reasonable scenario to another, move that fact to the top of the CPA, attorney, qualified intermediary, lender, broker, or licensed securities professional review.
The initial calculation review is free and can begin before listing, while under contract, during the identification period, or while comparing replacement options. The objective is to organize a clear exchange brief and route regulated work to the appropriate professional. The worksheet remains educational and should not be copied into a filed return or closing instruction without transaction-specific review.
Create a file another professional can audit.
Begin the handoff with the taxpayer name, relinquished property, qualifying use, anticipated closing date, exchange status, and the decision the calculation is meant to support. Separate facts already supported by a document from assumptions that still need confirmation. A one-page summary should tell a CPA, attorney, qualified intermediary, lender, broker, or licensed securities professional what is happening without forcing that person to reconstruct the transaction from scattered emails.
Label the source and date for every important number. Contract price, selling expenses, original cost, capital improvements, depreciation, debt payoff, exchange expenses, replacement price, new financing, and cash outside the exchange can change at different points. Keep the earlier worksheet instead of overwriting it. A visible version history makes it easier to explain why projected gain, boot, required equity, or estimated tax changed between listing, contract, identification, and closing.
Maintain a short decision log beside the numbers. Record open title questions, taxpayer-identity issues, related-party facts, mixed personal and investment use, lender constraints, identification choices, backup properties, and unresolved tax-character questions. Assign each issue to the professional responsible for answering it and include a due date tied to the actual transaction calendar. That turns the calculator from an isolated estimate into a working exchange checklist.
Before closing, reconcile the latest worksheet to the draft settlement statement, loan documents, qualified-intermediary instructions, title vesting, and replacement-property contract. After closing, preserve the final calculation, signed agreements, identification notice, settlement statements, depreciation records, and professional advice with the tax file. Organized support does not guarantee exchange treatment, but it reduces avoidable confusion when the return is prepared or the transaction is later reviewed.
Checks before relying on the output
- Do not allow an offering to be marked confirmed without a status date.
- Warn when planned equity exceeds available exchange equity.
- Warn when a DST candidate lacks current approved documents or allocation status.
- Never output a suitability score or recommendation.
The worksheet cannot recommend or determine suitability for any DST security.
Common questions
Can the worksheet recommend a DST?
No. It compares entered allocations and risks. Eligibility and suitability belong to the applicable regulated process and approved offering documents.
Why track allocated DST debt?
Property-level debt may affect exchange planning and investment risk. It should be shown with loan terms rather than treated only as a number used to fill a shortfall.
Can direct property and DST interests be combined?
They can appear in one planning worksheet, subject to identification, qualification, suitability, availability, and closing requirements for each component.
What concentration should be measured?
Sponsor, property, tenant, geography, asset type, leverage, maturity, and exit route can each create concentration even when the allocation contains several line items.
Why keep backup candidates?
A loan, title issue, offering closure, document problem, or investor-acceptance issue can remove a candidate before closing. Backups reduce dependence on one execution path.
