What is the 1031 exchange process with Origin Exchange?
- Engage a QI: Work with a qualified intermediary (QI) to open an account to receive your sale proceeds.
- Sell your property: Go through the normal process of selling your asset. At closing, the proceeds will be placed with your QI to maintain 1031 exchange eligibility.
- Identify the Origin DST property: Work with your QI to designate the Origin DST as your replacement property.
- Subscribe and transfer funds: Complete the subscription process, and your QI will wire the funds to the DST.
- Begin receiving distributions: Once your investment closes, you will start receiving monthly distributions immediately.
- DST phase: During the DST phase, you will receive monthly distributions, and any property appreciation earned during your hold period. Income can be offset with depreciation pass-through and filed as usual on Schedule E.
- DST phase tax reporting: You will receive a grantor letter, which you will use to complete Schedule E on your tax return.
- IncomePlus Fund option: After two years, Origin’s IncomePlus Fund has the right to acquire your DST interest.
- 721 exchange into the IncomePlus Fund: If the IncomePlus Fund acquires your DST interest, you will receive operating partnership (OP) units, which are tax-deferred under Section 721.
- IncomePlus Fund phase tax reporting: The IncomePlus Fund OP units will generate a K-1.
- Continued investment returns: Investors in the IPF operating partnership will receive the same returns as the fund, which targets 9% to 11% annual returns.