Open1031

DST Replacement Property — Flow Map

Delaware Statutory Trust · Fractional replacement option · §1031 Safe Harbor
Demo exchanger: Matt Belcher (synthetic) Relinquished: 456 Sunset Blvd, Los Angeles CA · $850,000 Replacement: DST interest in Oakridge Multifamily Portfolio DST · $825,000 Exchange #1087 · Sale closed Jun 1, 2026
DST REPLACEMENT PROPERTY: A DST is not a separate exchange type — it is a passive replacement-property option acquired inside a forward exchange. Same 6-step forward spine — but ID Hub lists a DST as ONE identified property (counts as 1 under the 3-property rule), and Purchase Hub switches to bodyVariant dst-subscription (subscription agreement + capital wire to trust; no real-property escrow, no closing, no HUD/ALTA). Disbursement wires QI escrow to the trust sponsor, not a title company. An optional post-completion 721 UPREIT exit converts the DST interest to REIT OP units.
Capability legend
Deterministic Watchable Document-Generating Approval-Gated Omitted in DST
vectr-workflow-name = named Vectr workflow DST Variant = bodyVariant substitution

DST Replacement Property

A DST interest acquired as replacement property inside a forward exchange. Forward spine with dst-subscription bodyVariant at Purchase — no real-property escrow or closing.

DST / Fractional §1031 Like-Kind
39 days to identify replacement · 45-day deadline: Jul 16, 2026 §1031(a)(3)(A)
174 days to close DST subscription · 180-day deadline: Nov 28, 2026 §1031(a)(3)(B)
Both clocks anchored on exchange.sale_closed (relinquished property transfer, Jun 1, 2026 — not the later proceeds-wired-into-QI event) — identical anchor to forward. The DST re-anchor is NOT needed because no EAT is involved.
Exchange completion 33%
DST replacement-property steps — 6 hubs (forward order preserved) Step 3 of 6 — ID Hub active
Neela · DST Identification guidance
You listed Oakridge Multifamily Portfolio DST as your identified replacement. A DST interest counts as 1 property under the 3-property rule — you have 2 remaining slots. Because there is no physical property to escrow or close on, your Purchase step will be a subscription agreement rather than a real-estate closing. Your $822,500 proceeds will wire directly to the trust sponsor after QI approval.
How DST differs from a forward real-property exchange — step-by-step
Step Forward (real property baseline) DST (fractional / this exchange) Change type
Sales Hub Relinquished sale closes; proceeds wire to QI Identical — no change No change
Escrow Hub Proceeds received into QI escrow; clocks already running from the relinquished-property closing Identical — no change No change
ID Hub Identify up to 3 replacement properties; generate Identification Notice DST listed as 1 property under 3-property rule; rule-option highlights DST as Recommended for passive investors; same Identification Notice generated bodyVariant: dst-id
Purchase Hub Real-property escrow opened; title milestones tracked; HUD/ALTA at closing; escrow-title-milestone-tracker DST Subscription: subscription agreement signed; capital wire to trust sponsor; NO escrow company, NO title milestones, NO HUD; escrow-title-milestone-tracker DROPPED bodyVariant: dst-subscription
Disbursement Hub QI escrow → title/escrow company (multi-party gate) QI escrow → DST trust sponsor (same multi-party gate, different destination) Wire destination differs
IRS Hub Form 8824 (like-kind real property) Form 8824 — DST interest qualifies as like-kind; identical workflow No change
DST correctness traps (Vectr must handle these)
TRAP 1 — escrow-title-milestone-tracker must be DROPPED from the DST config, not just hidden
A DST has no title milestones (no deed, no closing). If the Purchase Hub reuses the forward config and merely hides the UI, escrow-title-milestone-tracker will still be scheduled and will hang the 180-day deadline guard waiting for milestones that never arrive. The fix: the dst-subscription bodyVariant must explicitly remove escrow-title-milestone-tracker from the workflow list in the exchange config — not just toggle its UI visibility.
TRAP 2 — the 180-day guard predicate must be "subscription funded" not "title transferred"
The forward 180-day guard fires on "deed recorded" or "closing completed." In a DST, the equivalent completion event is "subscription agreement countersigned + capital wire confirmed to trust sponsor." If the guard inherits the forward predicate unchanged, it will never fire (no deed ever records) and the exchange will appear perpetually open past Day 180.
TRAP 3 — DST counts as 1 identified property, but must still satisfy the like-kind standard
A DST beneficial interest is treated as a direct interest in real property under Rev. Rul. 2004-86, making it like-kind to real property. The Identification Notice must name the DST as the identified replacement and the identification-notice-generate workflow must write "beneficial interest in [trust name]" as the property description — not a street address. Generating a notice with a blank or generic address field would produce a non-compliant ID Notice.
Step-by-step flow with Vectr workflow annotations
Sales Hub — Relinquished Sale Day 0 No DST change
456 Sunset Blvd, Los Angeles CA closes for $850,000
Exchange Agreement + Assignment of Contract signed via DocuSign
Net proceeds ($822,500 after costs) wire to QI escrow
QI officer authorizes receipt — multi-party gate
esign-orchestration escrow-wire-routing
Approval-Gated Doc-Gen
Exchange Agreement Assignment of Contract Wire Instruction Letter
Escrow Hub — Proceeds into QI Day 0 No DST change
QI confirms receipt of $822,500 into segregated escrow
Escrow receipt confirmation generated; both deadline clocks are already running from the relinquished-property closing
45-day ID clock + 180-day close clock armed on exchange.sale_closed (relinquished property transfer)
Identical anchor to forward — no DST re-anchor needed
escrow-funds-received forty-five-day-id-watcher one-eighty-day-deadline-guard
Deterministic Watchable Doc-Gen
Escrow Receipt Confirmation
45-day clock: Jul 16, 2026 180-day clock: Nov 28, 2026
ID Hub — Identify DST Replacement Day 0–45 bodyVariant: dst-id
IRS identification rule — DST preselection
Oakridge Multifamily Portfolio DST
Beneficial interest · Rev. Rul. 2004-86 · Like-Kind to real property
DST Interest
Trust Sponsor Evergreen DST Partners
Subscription Amount $822,500
Property Count (IRS) 1 of 3 used 3-property rule
Property Type Multifamily / Residential
Like-Kind Authority Rev. Rul. 2004-86
ID Notice Description Beneficial interest in Oakridge Multifamily Portfolio DST No street address — trust name only
TRAP 3 GUARD: Identification Notice will read "Beneficial interest in Oakridge Multifamily Portfolio DST" — the identification-notice-generate workflow writes trust name, not a street address. A blank or generic address would produce a non-compliant Notice.
forty-five-day-id-watcher identification-notice-generate
Watchable Doc-Gen Approval-Gated
Identification Notice (DST trust-name format)
NO escrow-title-milestone-tracker

Confirming generates and sends the Identification Notice. This action is logged and cannot be undone within the 45-day window.

Purchase Hub — DST Subscription Day 46–180 bodyVariant: dst-subscription
MAJOR VARIANT: This hub renders the dst-subscription body — NOT the standard real-property closing flow. There is no escrow company, no HUD/ALTA statement, no deed, and no title milestones. The escrow-title-milestone-tracker workflow is DROPPED from config entirely.
Forward baseline (omitted)
Open replacement escrow with title company
Track escrow/title milestones
HUD/ALTA settlement statement upload
Deed recorded event triggers 180-day guard
escrow-title-milestone-tracker workflow
DST Subscription (this flow)
DST Subscription Agreement signed via DocuSign
Trust sponsor countersigns; beneficial interest issued
No HUD — Trust sponsor issues investment confirmation
"Subscription funded" event triggers 180-day guard completion
escrow-title-milestone-tracker DROPPED
Subscription details
DST / Trust Name Oakridge Multifamily Portfolio DST From ID Hub — verified
Trust Sponsor Evergreen DST Partners
Subscription Amount $822,500 = net QI escrow balance
Offering Type Regulation D / Private Placement
Subscription Agreement Status Pending e-sign
Trust Sponsor Wire Instructions Provided in offering package
esign-orchestration one-eighty-day-deadline-guard
Approval-Gated Doc-Gen Watchable
DST Subscription Agreement Investment Confirmation
NO escrow-title-milestone-tracker NO HUD/ALTA

Confirming advances the exchange to Disbursement. The 180-day guard predicate "subscription-funded" will be satisfied.

Disbursement Hub — QI Escrow → Trust Sponsor Wire Day 46–180 Wire destination differs
The bank wires $822,500 to Evergreen DST Partners (trust sponsor) — NOT to a title company
Same multi-party gate; different beneficiary address in wire instruction
Two authorized officers authorize the release, proposer distinct from approver — no single-person release
Constructive-receipt firewall: multi-party Vectr workflow, exchanger never receives funds directly
Wire confirmation triggers 180-day guard "subscription-funded" predicate
Exchange completion event fires to Supabase + audit log
escrow-wire-release
Multi-Party Approval Deterministic Doc-Gen
Wire Authorization Wire Confirmation
Same workflow as forward (escrow-wire-release), different wire-instruction beneficiary. The trust sponsor's bank routing is sourced from the DST offering documents, not a title company HUD.
IRS Hub — Form 8824 Day 180+ No DST change
Form 8824 prefill: DST beneficial interest qualifies as like-kind to real property (Rev. Rul. 2004-86)
Exchanger + CPA review; QI counter-sign
Basis and recognized-gain computation identical to forward — no DST-specific §1031(d) adjustment needed
Optional 721 UPREIT exit is a SEPARATE post-exchange event; it does NOT affect Form 8824
form-8824-generate
Doc-Gen Approval-Gated
IRS Form 8824 (PDF) Exchange Archive (ZIP)
Optional post-completion branch — 721 UPREIT Exit
721 UPREIT Exit — DST Interest → REIT OP Units
Post-exchange, tax-deferred conversion under IRC §721. Separate from the §1031 exchange — does not affect Form 8824.
Post-Exchange · Optional
Trigger

DST trust sponsor offers a contribution agreement to contribute trust assets to a REIT Operating Partnership in exchange for OP Units. Exchanger opts in voluntarily — no IRS deadline governs this step.

What transfers

DST beneficial interest → REIT OP Units (illiquid, convertible to REIT shares typically after 1-year hold). Exchanger goes from passive DST income to passive REIT distributions.

OP Unit Contribution Agreement REIT OP Unit Certificate
Tax treatment

Treated as a capital contribution under §721 — no immediate gain recognition if no boot. Deferred gain from the §1031 exchange carries into the OP Unit basis. CPA review required.

CPA Review Required
The 721 UPREIT exit is a separate post-exchange event. It does NOT change Form 8824, does NOT restart any IRS clocks, and is NOT modeled as a hub in the §1031 exchange flow. Open1031 surfaces the option after the IRS Hub is complete and the exchange archive is generated. Automation TBD — likely a dedicated Vectr workflow outside the exchange spine.
Vectr workflows — DST configuration vs forward baseline
Workflow Forward baseline DST replacement property Change
esign-orchestration Exchange Agreement + Assignment + ID Notice + DST Subscription Agreement Extended scope
escrow-funds-received Proceeds in; both clocks already running from closing Identical No change
forty-five-day-id-watcher Identify replacement property (real) Identical — DST counts as 1 property No change
identification-notice-generate Street address in Notice Trust name in Notice (no street address) Output format change
one-eighty-day-deadline-guard Predicate: deed recorded / closing complete Predicate: subscription-funded event Predicate change
escrow-title-milestone-tracker Title milestones tracked to close DROPPED — no title milestones in DST Dropped (must not run)
escrow-wire-release QI → title company QI → trust sponsor (different beneficiary) Config change
form-8824-generate Like-kind real property Identical — DST qualifies under Rev. Rul. 2004-86 No change
Documents generated — DST replacement property (8 total)
Exchange Agreement Sales
Exchanger + QI · esign-orchestration
Assignment of Contract (Relinquished) Sales
Exchanger + QI · esign-orchestration
Escrow Receipt Confirmation Escrow
Automated · escrow-funds-received
Identification Notice — DST Trust Name Format ID
Exchanger e-sign · identification-notice-generate
DST Subscription Agreement Purchase
Exchanger + Trust Sponsor · esign-orchestration
Investment / Beneficial Interest Confirmation Purchase
Trust Sponsor · escrow-wire-release trigger
Wire Authorization + Wire Confirmation Disbursement
Two authorized officers · escrow-wire-release
IRS Form 8824 IRS
Exchanger + CPA + QI · form-8824-generate
Forward baseline generates 10 documents. DST drops 2 (HUD/ALTA settlement statement, title milestone reports) and adds 2 (DST Subscription Agreement, Beneficial Interest Confirmation) — net parity at 10, but the removed items are entirely different artifacts.
Vectr workflows (DST)
7
of 8 forward workflows (1 dropped)
IRS hard deadlines
2
45-day ID · 180-day close — same as forward
Human approval gates
4
KYC · e-sign (sub. agreement) · wire release · OFAC
DST bodyVariant subs
2
ID: dst-id · Purchase: dst-subscription
Workflows DROPPED
1
escrow-title-milestone-tracker — must not run
Open1031 Design System Mockup · Synthetic data only · No NPI
DST flow map · Rev. Rul. 2004-86 · §1031 · §721 · All hubs