DSTs are a type of partnership in which an investor owns an undivided interest in real property. The IRS allows an investor to use 1031 exchanges to defer the taxable gain if they then use the proceeds to invest in a DST property.
Doing a 1031 into a DST is the same process as a typical 1031 exchange. The time frames are the same, and the seller also works with a qualified intermediary. Regulations differ in a DST’s operation and structure.