The short answer
No, unless the agent is separately registered to sell securities. A DST beneficial interest counts as real estate for section 1031 under Rev. Rul. 2004-86, but to the securities laws it is a private placement, and 15 U.S.C. section 78o(a)(1) bars anyone from inducing its purchase for pay without broker-dealer registration. The SEC says there is no general exception for licensed real estate agents, and FINRA Rule 2040 bars the selling firm from paying an unregistered agent a referral fee. Your agent can introduce you for free and keep doing the real estate work; the DST interest you then buy is illiquid and can lose value.
At a glance
| Tax label | Real property interest for section 1031, Rev. Rul. 2004-86 |
|---|---|
| Securities label | Private placement under Rule 506 of Regulation D |
| Who may sell | A registered broker-dealer representative or a registered investment adviser |
| Real estate licence | Covers brokering real property; gives no exemption from securities registration |
| Referral fee | A FINRA member may not pay compensation to an unregistered person, Rule 2040 |
| Form D Item 12 | Every person paid in connection with sales, including finders, is listed with any CRD number |
| The agent as intermediary | Your agent within the prior two years is a disqualified person and cannot be your QI |
| Risk | No public market for the interest; principal and distributions are not assured |
One asset, two licences: the real estate licence stops at the deed
Rev. Rul. 2004-86 treats each beneficial owner of a qualifying Delaware statutory trust as owning an undivided fractional interest in the trust's real estate, so the exchange is of real property for real property and not for a certificate of trust. That holding is about federal income tax and nothing else.
Whether the same interest is a security is a separate question with a settled answer. Sponsors sell DST interests under Rule 506 of Regulation D, an exemption from registering the offering, not from the rules on who may sell it, and 15 U.S.C. section 78o(a)(1) makes it unlawful for an unregistered broker to effect or induce the purchase or sale of a security. The two labels coexist, as is a DST a security and who can sell one explains.
The real estate licence does not bridge the gap. The SEC's guide to broker-dealer registration names people who market real estate investment interests that are securities, such as tenancy-in-common interests, among those who may need to register, and says there is no general exception for licensed real estate brokers or agents.
The referral fee is the part that breaks the rules, from both directions
The SEC guide treats pay that depends on the outcome or size of the transaction as the mark of broker activity, and lists finding investors for issuers, even as a consultant, as something that may require registration. An agent paid when you subscribe is taking transaction-based compensation, whatever the payment is called.
The firm on the other side is bound too. FINRA Rule 2040 says no member shall, directly or indirectly, pay compensation to a person who is not registered as a broker-dealer where receiving it would require registration, and expects the member to support, through SEC releases, a no-action letter or a legal opinion, any conclusion that the recipient need not register.
The sponsor's filing exposes the arrangement. Item 12 of Form D lists each person paid, directly or indirectly, any commission or similar compensation in connection with sales, including finders, with any CRD number and the states solicited. Rule 506(d) also counts any person paid for soliciting purchasers as a covered person under the bad-actor rules, so a sponsor has its own reason to refuse an unregistered finder.
What your agent can still do, and what an agent with both licences has to disclose
Plenty. The agent can time the sale so your exchange agreement is signed before closing, make sure the buyer's funds go to the intermediary, and introduce you to a registered firm without being paid for it, which keeps clear of the transaction-based pay the SEC guide treats as the mark of a broker. The agent's exchange role is set out on the 1031 exchange guide for commercial brokers.
Some agents also hold a securities registration through a broker-dealer. Look for the Series 7, which covers all securities products, or the Series 22 for direct participation programs in real estate, oil and gas and equipment leasing. Both require sponsorship by a FINRA member firm, so a dual-licensed agent sells the DST through that firm, on its paperwork, under its supervision.
When that happens, Regulation Best Interest requires the firm to disclose in writing the capacity the person acts in, with the material fees and conflicts. One person would then earn a real estate commission on the sale and a securities commission on the replacement, a conflict to weigh with the questions on advisor fees and conflicts for DSTs.
A separate rule keeps your agent out of the intermediary's chair and off the identification notice
Even with no DST involved, the exchange regulation limits your agent. Reg. section 1.1031(k)-1(k) makes a disqualified person of anyone who is your agent at the time of the transaction, including anyone who acted as your real estate agent or broker within the two years ending on the transfer of the relinquished property. Services for section 1031 exchanges, and routine title, escrow and trust services, are the carve-outs.
A disqualified person cannot be your qualified intermediary under paragraph (g)(4), and paragraph (c)(2) requires your identification to go to a person involved in the exchange other than you or a disqualified person, so a notice handed to your listing agent does not count. The mechanics are on who should receive the identification notice.
The result is a clean division of labour: the agent sells the relinquished property, the intermediary holds the money and takes the notice, and a registered firm places the replacement interest, as compared on qualified intermediary or DST advisor.
A hypothetical offer to split a commission, and what to do with it
Hypothetical: your commercial broker, who is not securities-registered, says a DST firm will send him a share of its commission on your $800,000 subscription. That is money leaving the offering before any real estate is bought, a payment Rule 2040 bars the firm from making, and pay section 78o bars the broker from taking. Decline it, and after the first sale read the offering's Form D on EDGAR to see who is listed in Item 12.
Ask the registered firm in writing whether anyone outside it is being paid in connection with your purchase, and ask the broker whether his introduction carries any payment. The checks to run on any firm before wiring are on do I need a broker to buy a DST.
None of this changes the investment itself. The trust cannot take new contributions or renegotiate its debt under the ruling, your interest has no established market, and the property can sell for less than it cost. Keep the tax projection with your CPA and decide on the fee table and the memorandum, not on who introduced whom.
Related questions
Can a real estate agent hold a securities licence as well?
Yes. An agent who passes the Securities Industry Essentials exam plus a Series 7 or Series 22 and a state law exam, and who is sponsored by a FINRA member firm, may sell DST interests through that firm. The sale then runs on the firm's documents and under its supervision, not through the real estate brokerage.
A brokerage advertises a DST referral programme for agents. Is that lawful?
Only if every agent paid is registered to receive transaction-based compensation, because FINRA Rule 2040 bars members from paying unregistered persons and section 78o bars unregistered persons from soliciting for pay. Ask the programme's sponsor which broker-dealer the agents are registered with and check the names on Form D Item 12.
Could the sponsor pay my agent directly instead of the broker-dealer paying?
The source of the payment does not cure the problem. Compensation tied to the sale is what triggers registration, and Form D requires the issuer to list every person paid directly or indirectly, including finders. Rule 506(d) also treats any paid solicitor as a covered person whose history can disqualify the offering.
Can I pay my agent myself to help me choose between DSTs?
Advising on securities for compensation can itself require registration as an investment adviser, so this is a question for the agent's own counsel before any fee is agreed. If you want paid advice on the choice, a registered investment adviser is the role built for it; see registered investment adviser.
Can my agent be my qualified intermediary to save a fee?
No. Under Reg. section 1.1031(k)-1(k) a person who acted as your real estate agent or broker within the prior two years is a disqualified person, and a qualified intermediary must not be one. Use an independent intermediary; do I need a QI to exchange into a DST explains why the subscription does not remove that need.
Sources
Checked against these publications on October 8, 2026. Rules and figures change; confirm the current version with your CPA or attorney before you act. This page is general information, not tax or legal advice.
- Rev. Rul. 2004-86 (IRS)
- 15 U.S.C. section 78o, registration and regulation of brokers and dealers
- SEC Division of Trading and Markets, Guide to Broker-Dealer Registration
- FINRA Rule 2040, Payments to Unregistered Persons
- 17 CFR 230.506, Rule 506 of Regulation D, including 506(d) covered persons
- SEC Form D and instructions (Item 12, Sales Compensation)
- FINRA, Series 7 General Securities Representative Exam
- FINRA, Series 22 Direct Participation Programs Representative Exam
- 17 CFR 240.15l-1, Regulation Best Interest
- Treas. Reg. section 1.1031(k)-1, deferred exchanges, paragraphs (c), (g) and (k)