How do I identify a DST interest on my 45-day identification list?

You are identifying real estate, so the description standard for real estate applies

Rev. Rul. 2004-86 holds that an owner of a properly structured Delaware Statutory Trust is "considered to own an undivided fractional interest" in the trust's property, which is why the interest can be like-kind replacement property. Your notice therefore has to describe real property.

Reg. section 1.1031(k)-1(c)(3) says replacement property "is identified only if it is unambiguously described," and that real property generally is when described "by a legal description, street address, or distinguishable name (e.g., the Mayfair Apartment Building)." A trust's legal name works as a distinguishable name; the property address removes any doubt about which offering you meant.

Vague categories fail. The regulation's Example 3 rejects "unimproved land located in Hood County with a fair market value not to exceed $100,000" even though the parties later agreed which parcel it meant. A sponsor's brand or an asset class is the same kind of description.

Three elements make a DST entry unambiguous: the trust's legal name, its property and your amount

Take the name from the private placement memorandum or subscription agreement, not from marketing material, because sponsors often run several trusts with similar names. For a single-property trust add the street address; for a portfolio trust, add a reference to the property schedule in the offering memorandum dated as of your notice.

State the size of the interest in dollars. You are buying a slice, not the building, and the amount tells everyone, including an examiner reading your Form 8824 years later, what you meant to acquire. If you might invest more than one figure, name the larger one, since what you finally receive must be substantially the same as what you named.

• Hypothetical entry: "A beneficial interest of $400,000 in [Trust legal name], a Delaware statutory trust, which owns the property at [street address, city, state]."
• Portfolio trust: "A beneficial interest of $250,000 in [Trust legal name], a Delaware statutory trust, owning the properties listed in its memorandum dated [date]."
• Sign and date the notice, list every property on it, and keep the delivery record.

The notice goes to your intermediary, signed, before midnight on day 45

Paragraph (c)(2) of the regulation requires "a written document signed by the taxpayer" that is "hand delivered, mailed, telecopied, or otherwise sent" before the period ends to the person obligated to transfer the property to you or to another person involved in the exchange who is not a disqualified person. Your own broker, attorney or CPA is the wrong recipient; who has to receive the notice explains why.

Whether email and an electronic signature are enough is covered in identification by email or text. The general mechanics for any property are in how to identify replacement property.

Worked example: one building and two trusts on a $1,200,000 sale

Hypothetical, round figures; run your own numbers with your CPA. You sell a rental for $1,200,000 and net $900,000 at the intermediary. On day 30 you name a $1,000,000 retail building you are negotiating for, a $500,000 interest in a single-property multifamily trust, and a $400,000 interest in a single-property industrial trust.

Three names satisfies the three-property rule regardless of value, so you need no arithmetic. If the building deal dies on day 70, both trusts are still on the list and you can close either or both by day 180.

Add a fourth name and you leave the three-property rule for the 200% rule, where values count; how to stack several trusts under that ceiling is in identifying several DSTs under the 200% rule.

Check availability before day 45, because an offering can fill after you name it

A name on your list is not an allocation. If the trust sells out before you subscribe, you are left with the other names, and nothing can be added after day 45, as explained in changing your list after day 45.

Ask for written confirmation of availability and of the minimum before you name a trust; the client typically works with minimums between $100,000 and $250,000 per DST. Using trusts as backups behind a direct purchase is covered in the DST backup strategy.