The short answer
Not in the way a direct purchase has them. The trust bought the property and paid its own title, lender and acquisition costs, and those costs, with the selling commissions and sponsor fees, are built into the price of each interest. You pay the subscription price and nothing is deducted at a closing table. Your out-of-pocket costs are your qualified intermediary's fee and any CPA, attorney or accreditation letter you need, which count as exchange expenses on Form 8824.
At a glance
| Title and escrow | Paid by the trust when it acquired the property, not billed to investors |
|---|---|
| Where the costs sit | Inside the offering price: loads, sponsor fees, financing costs and reserves |
| One filed example | About 11.6% of the maximum raise went to selling costs, sponsor fee and offering expenses |
| Your separate costs | Intermediary fee, plus any CPA, attorney or verification letter |
| Tax treatment of your costs | Exchange expenses reduce the cash boot line or add to basis on Form 8824 |
| Paying from exchange funds | Typical closing-statement items do not break the intermediary safe harbor |
There is no closing table for you, because the trust already bought the building
A DST acquires its property, places its loan and pays the related title, escrow, legal and lender charges before or as the offering opens. You buy a beneficial interest from the trust, and under Rev. Rul. 2004-86 that interest is treated as an undivided fractional share of the real estate the trust already owns. There is no deed in your name, no title policy to buy and no settlement statement with your name on it.
So the subscription price is the whole check. If you invest $250,000, the intermediary wires $250,000 to the trust or its escrow, and the confirmation of ownership shows a $250,000 purchase. What you need to sign is covered in documents signed to close on a DST.
The acquisition costs are in the price, and Form D shows how much
Form D Item 15 reports estimated sales commissions and Item 16 the proceeds paid to the sponsor and related persons. In a 2025 industrial portfolio filing on a maximum raise of $29,650,000, selling costs were $2,668,500 and the sponsor fee plus organization and offering expenses were $771,603, together about 11.6% of the offering.
Other filings fold more into that line. A 2025 build-to-rent filing lists a sponsor acquisition fee, managing broker-dealer fee, due diligence fee, organization and offering expenses and acquisition financing costs. A 2026 surgery center filing notes reserves and allowances that may be retained by an affiliate. These are the costs a direct buyer pays at closing, plus the cost of selling the interests.
None of this shows up as a deduction from your wire, but it determines how much real estate each dollar buys. The full stack is in DST fees and loads, and whether any of it can move is in are DST fees negotiable.
Worked example: what $500,000 buys in a trust with an 11.6% load
Hypothetical round numbers based on that filing's proportions; run your own numbers with your CPA. Your $500,000 subscription is your replacement purchase price, so for exchange purposes you acquired $500,000 of replacement property. If the offering raises its maximum, about $58,000 of that went to commissions, the sponsor fee and offering expenses.
The rest, plus your share of the trust's loan, pays for the property, reserves and the trust's own acquisition and financing costs. That is why two offerings with the same headline price per interest can hold different amounts of real estate behind each dollar.
For the exchange math only the purchase price matters. To avoid boot, your total replacement value and debt still need to match what you sold, as explained in whether a DST's loan counts as replacement debt.
Compared with buying a building directly, the costs move rather than disappear
Buy a property yourself and you pay title insurance, escrow, recording, lender fees and inspections at closing, and you negotiate many of them. In a DST the same categories exist but the sponsor has already paid them and priced them into the offering, alongside the cost of selling the interests. You trade control over those costs for speed and a closing with nothing to settle.
The trust's costs do not end at purchase. The filed DST trust agreement has the manager distribute sale proceeds net of closing costs and the fee due to the manager, so selling costs come out at the end too. Read both ends in the memorandum before comparing an offering with a direct purchase; DST vs NNN property sets the two side by side.
Your own costs are exchange expenses, and the intermediary can usually pay them
The costs that are yours are the intermediary's fee and anything you pay your CPA, attorney or a verifier for an accreditation letter. The Form 8824 instructions let exchange expenses reduce the cash and other property you received on line 15, or add them to basis on line 18 to the extent they were not used on line 15.
Paying certain costs from exchange funds does not spoil the safe harbor. Reg. section 1.1031(k)-1(g)(7) disregards transactional items that appear on typical closing statements, such as commissions, prorated taxes, recording or transfer taxes and title fees. Fees that do not fit that description are safer paid from your own pocket; closing costs paid from exchange funds sorts the list.
A cost budget for the whole exchange is in how much a 1031 exchange costs.
Related questions
Will I owe transfer tax on a DST interest?
The trust paid any transfer tax due when it acquired the property, and investors are not billed for it at subscription. Ask the sponsor if your state taxes transfers of beneficial interests in entities that own local real estate.
Do I pay a lender's origination fee?
Not separately. Financing costs are paid by the trust and, in some offerings, are listed among the costs funded from the raise.
Is the intermediary's fee deductible?
It is treated as an exchange expense on Form 8824, reducing recognized boot or added to the basis of what you acquired.
Are there costs when the trust sells?
Yes. Sale costs and any disposition fee are paid by the trust from sale proceeds before distribution, as the trust agreement provides.
Does a higher load reduce my replacement value?
No. Your replacement value is the price you paid. The load affects how much property sits behind that price, not the exchange math.
Sources
Checked against these publications on September 30, 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.
- IRS, Rev. Rul. 2004-86, Internal Revenue Bulletin 2004-33
- IRS, Instructions for Form 8824
- Treas. Reg. section 1.1031(k)-1(g)(7), items disregarded
- SEC Form D, industrial portfolio DST offering (CIK 2084282), 2025
- SEC Form D, build-to-rent DST offering (CIK 2080386), 2025
- SEC Form D, surgery center DST offering (CIK 2144572), 2026
- SEC, DST trust agreement filed as Exhibit 10.2 to a Form 8-K (2021)