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7 Tax Strategies Beyond the 1031
Eight structures can defer the tax on a self-storage sale. The 1031 is the one you already know. This guide is the other seven.
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An owner tells us they need $10 million to sell. That is usually a tax bill setting an asking price, and it is the most expensive assumption in this business. Eight structures can defer that tax. The 1031 exchange is the eighth and the only one most owners are ever offered, so this guide takes it as read and lays out the other seven: what each one actually does to the math, and the honest catch in every one of them. Read it the way you would read a menu, not a prescription.
The PDF arrives by email in a minute or two. No cost, no obligation. Oakside is not a registered investment advisor and this guide is education, not advice.
Oakside Companies. Florida real estate broker licence BK3367978.
What is inside
The seven beyond the 1031. Each with the math, and the catch.
- 01
The Buy-First Exchange
Acquire the replacement facility before you sell, so a 45-day scramble is not the thing setting your price.
- 02
The Institutional Handoff
Contribute the facility rather than selling it, and own a piece of hundreds of storage facilities rather than one facility.
- 03
The Two-Step Rollup
Sell on the open market to the buyer who pays the most, then move the proceeds into a passive institutional position in two steps.
- 04
The Legacy Income Trust
For owners who already give to a charity: lifetime income, a deduction in the year of the transfer, and the asset out of the estate.
- 05
The Banker's Seat
You carry the note. The tax on the gain spreads across the payments instead of landing in one year.
- 06
The Diversified Installment Trust
Installment treatment without needing a buyer who wants to be your borrower, and no requirement to go back into real estate.
- 07
The Decade-Zero Fund
Roll the gain into a qualified opportunity fund, hold ten years, and the appreciation on that new investment comes out tax-free.
- 08
Which strategy fits you
Five questions, then a comparison table covering deferral, passive income, the step-up for heirs, and who each structure is for.
Who it is for
Written for one reader.
- You have been told the 1031 is your option, and you do not want another property to manage.
- You are holding out for a number that is really a tax bill plus the cash flow you are afraid of losing.
- You want your CPA and your attorney to build the structure, and you want to walk in already knowing what to ask for.
- You are charitably inclined, or you want income, or you want a decade of tax-free growth. Different answers point at different structures.
“It's one thing to say, hey, this company offers a DST into 721 process. It's another thing to put all the team together, let us speak to them in advance, get comfortable with it, so that we weren't out trying to build that ourselves.”
About the author
Nolen Masserman
Managing Director, Oakside Companies. Denver, Colorado.
Nolen wrote this guide. He spent five years as a VP of Acquisitions underwriting billions of dollars of self-storage on the buy side, and his career before that ran through investment banking and private equity.
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Pre-Sale Strategy Session
Thirty minutes that can change what you keep from the sale.
A confidential call with Oakside's founders. We narrow the seven deferral structures beyond the 1031 to the two or three that fit your facility, and run the number you actually need after closing.