1. 1031 Private Placement Products:
An Explanation of DSTs & 1031 Energy Products

2. Keith Lampi – Sr Vice President Mark Petersen –
Moderator
Dan Cullen – Partner
Bryan Cave LLP
Panelists
Bill Winn – President
Passco
Keith Lampi – Sr Vice President
Inland Private Capital Corporation
Mark Petersen –
Sandlapper Securities

3. DST Structures – tax issues
§1031(a)(2)(D) prohibits acquiring partnership interests in like-kind exchanges
§1031(a)(2)(E) prohibits acquiring certificates of trust or beneficial interests in like-kind exchanges
If properly structured, TIC interest and DST interest are “like-kind” to direct fee ownership

4. Fixed Investment Trust:
DST Structures – tax issues
Fixed Investment Trust:
Trustee must not have power to vary the investment
Treas. Reg. §
Case law and Rulings--
Chase National Bank, 122 F.2d 540 (CA-2, 1941)
North American Bond Trust, 122 F.2d 545 (CA-2, 1941)
Rev. Rul. 75 – 192
Rev. Rul. 78 – 371

5. DST Structures – tax issues
If trustee engaged in prohibited activities trust would be treated as business entity, not investment trust
If treated as business entity trust would be treated as partnership and beneficial interest would not qualify as replacement property in a like-kind exchange
DST has limited application for some structures; but may be highly useful for others depending upon the underlying asset

6. DST – Acquisition Structure
Investors
Tenants
Holdings LLC
Sponsor/Depositor 3D
Sub Lease 1 $X
Sponsor
Affiliate
Master Lessee
Sponsor
Affiliate
Manager
Seller 3A
$X + $Y
Trustee 3C
Trust
Agreement
Trust
Agreement
Master
Lease
Properties 3B
Transfer
of Properties
Delaware
Statutory Trust
DST 2 $Y
Lender 3E
Security Interest

7. DST – Post Sale to Investors
Holdings LLC
Sponsor/Depositor
Investors
Sponsor
Affiliate
Manager
Trustee
Class B
Beneficial
Interest
Sponsor
Affiliate
Master Lessee
Trust
Agreement
Trust
Agreement
Delaware
Statutory Trust
DST
Sub Lease
Master Lease
Lender
Loan
Tenants
Properties
Secured
Interest

8. Current DST Trends: DST/TIC demand today? Projection for future?
Structures used?
Broker Dealer and Rep hot buttons/concerns?
Underwriting – overcoming front end load, rent growth, going in and exit cap rates, acquisition strategies?
Fees – to sponsor and BD's?
Lenders available – Agencies, conduits and banks?

9. Current DST Trends: Loan work-out and restructuring options:
springing the DST to an LLC,
back to a DST after work out?
  TIC roll ups into LLC or UPREIT
use of UPREIT call options
Investor communications: best practices?

10. Oil & Gas 1031 Structures: Royalty Interests Working Interests
Profits Interests
Production Payment
Farm-out Arrangements

11. New Oil & Gas 1031 Alternatives:
Salt water disposal wells?
  Other?

12. Thank You