What Tax Documents Does a DST Investor Actually Receive?

Part 1 — Under­stand­ing Your DST Tax Pack­age

DST.EDU Spe­cial Series

Octo­ber 1, 2026

By Al DiNi­co­la, AIF®
Pri­vate Fund Advi­sor
DST 1031 Spe­cial­ist
Fidu­cia­ry Cap­i­tal Man­age­ment, LLC

What Investors and Their CPAs Need to Know About DST Tax Report­ing

If this is your first tax sea­son as a Delaware Statu­to­ry Trust investor, your DST tax pack­age may look unfa­mil­iar.

Most spon­sors now deliv­er tax doc­u­ments elec­tron­i­cal­ly through an investor por­tal. My first sug­ges­tion is sim­ple: down­load the com­plete pack­age when it becomes avail­able rather than rely­ing on per­ma­nent access to the por­tal.

If you have owned stocks, you may be used to receiv­ing Forms 1099. If you have invest­ed in part­ner­ships or LLCs, you may be accus­tomed to wait­ing for a Sched­ule K‑1. If you have owned rental real estate direct­ly, you may be used to giv­ing your accoun­tant infor­ma­tion on rents, mort­gage inter­est, prop­er­ty tax­es, expens­es, and depre­ci­a­tion.

A DST tax pack­age can look dif­fer­ent. That does not nec­es­sar­i­ly mean some­thing is miss­ing.

This series is not intend­ed to turn investors into tax pre­par­ers. We are not CPAs, and this is not tax advice. The goal is to help you under­stand what you receive and what your tax pro­fes­sion­al may need.

Why DST Tax Report­ing Looks Dif­fer­ent

For many real estate DSTs, the tax frame­work begins with IRS Rev­enue Rul­ing 2004–86. In the spe­cif­ic struc­ture addressed by the rul­ing, the IRS con­clud­ed that the DST was clas­si­fied as an invest­ment trust and that ben­e­fi­cial own­ers were treat­ed for fed­er­al income-tax pur­pos­es as own­ing pro­por­tion­ate inter­ests in the under­ly­ing rental real estate.

That dis­tinc­tion mat­ters because the investor may receive tax infor­ma­tion tied to a pro­por­tion­ate inter­est in income-pro­duc­ing real estate, includ­ing rental income, mort­gage inter­est, real estate tax­es, oper­at­ing expens­es, and depre­ci­a­tion.

Depre­ci­a­tion can be espe­cial­ly impor­tant because your result may depend on how you acquired the DST, your tax basis, any pri­or depre­ci­a­tion, and whether a §1031 exchange was involved.

In sim­ple terms, the tax pack­age helps your CPA under­stand your por­tion of the tax activ­i­ty gen­er­at­ed by the prop­er­ty.

The Grantor Trust Tax Infor­ma­tion State­ment

One of the most impor­tant doc­u­ments you may receive is com­mon­ly called a Grantor Trust Tax Infor­ma­tion State­ment. Depend­ing on the spon­sor, it may also be called a Grantor Trust Let­ter, Own­er Infor­ma­tion State­ment, or some­thing sim­i­lar.

I like to describe this doc­u­ment as the road map to the DST’s tax report­ing for the year.

Rather than giv­ing you one “income” num­ber, the state­ment may show your pro­por­tion­ate share of rental income, mort­gage inter­est, real estate tax­es, prop­er­ty expens­es, depre­ci­a­tion, and oth­er tax items.

Here’s the impor­tant part: a DST tax pack­age should not nec­es­sar­i­ly be treat­ed like a sim­ple bro­ker­age state­ment where you find one num­ber, enter it into tax soft­ware, and move on. Your CPA may need to review sev­er­al pieces of infor­ma­tion togeth­er.

“Where Is My K‑1?”

One ques­tion I hear often is, “Where is my K‑1?”

If you have invest­ed in real estate part­ner­ships, you may be con­di­tioned to expect one every year. But do not auto­mat­i­cal­ly assume some­thing is wrong if your DST pack­age does not con­tain a K‑1.

A Sched­ule K‑1 is com­mon­ly asso­ci­at­ed with a part­ner­ship or anoth­er enti­ty using K‑1 report­ing. A DST struc­tured and oper­at­ed as the invest­ment trust con­tem­plat­ed by Rev­enue Rul­ing 2004–86 fol­lows a dif­fer­ent fed­er­al tax frame­work.

So rather than ask­ing only, “Where is my K‑1?” I sug­gest ask­ing:

“Did I receive the com­plete tax-report­ing pack­age for this par­tic­u­lar DST?”

That pack­age may con­sist pri­mar­i­ly of a Grantor Trust Tax Infor­ma­tion State­ment and sup­port­ing sched­ules. Your CPA should review the doc­u­ments that were actu­al­ly issued rather than assume the DST should be treat­ed like an LLC or lim­it­ed part­ner­ship.

Look Beyond the First Page

Anoth­er point I empha­size is this: do not stop after read­ing the sum­ma­ry page.

A DST tax pack­age may include detailed depre­ci­a­tion sched­ules. If a cost-seg­re­ga­tion study has been per­formed, there may also be infor­ma­tion show­ing how por­tions of the prop­er­ty’s depre­cia­ble basis have been clas­si­fied.

Cer­tain assets may fall into 5‑, 7‑, or 15-year cat­e­gories, while res­i­den­tial rental real estate gen­er­al­ly uses 27.5 years and non­res­i­den­tial real prop­er­ty 39 years under MACRS.

This mat­ters because two investors can own the same dol­lar amount of the same DST and still have dif­fer­ent tax results.

Sup­pose Investor A invests $500,000 in cash. Investor B also invests $500,000, but acquires the DST through a §1031 exchange after own­ing and depre­ci­at­ing anoth­er prop­er­ty for many years.

They invest­ed the same amount, but that does not auto­mat­i­cal­ly mean they have the same tax basis or depre­ci­a­tion result. Your CPA needs to under­stand your tax his­to­ry, not just the spon­sor’s gen­er­al illus­tra­tion.

Why Forms 1099 May Also Show Up

Depend­ing on the DST’s report­ing method and activ­i­ty dur­ing the year, Forms 1099 may also be includ­ed. Cer­tain grantor trusts may use Forms 1099 togeth­er with infor­ma­tion state­ments pro­vid­ed to own­ers.

The sam­ple Forms 1098, 1099-INT, and 1099-MISC shown in DST Wealth Build­ing are illus­tra­tive exam­ples only. Actu­al DST tax report­ing may instead appear on the investor’s Grantor Trust Tax Infor­ma­tion State­ment, depend­ing on the struc­ture and report­ing method.

Do not take a 1099, enter the num­ber on your tax orga­niz­er, and dis­card the rest of the pack­age. A num­ber on a 1099 may need to be under­stood togeth­er with the Grantor Trust Tax Infor­ma­tion State­ment and sup­port­ing sched­ules.

Let your CPA rec­on­cile the doc­u­ments.

Do Not For­get About State Tax­es

Your DST prop­er­ty may be locat­ed in a dif­fer­ent state from where you live. A port­fo­lio DST may even own prop­er­ties in sev­er­al states.

Your pack­age may there­fore include state-spe­cif­ic infor­ma­tion. Depend­ing on the cir­cum­stances, there may be addi­tion­al fil­ing or with­hold­ing con­sid­er­a­tions.

Liv­ing in a state with­out an indi­vid­ual income tax does not mean you should ignore infor­ma­tion from the state where the DST prop­er­ty is locat­ed.

DST Tax Pack­age Check­list: What to Send Your CPA

When your tax pack­age arrives, keep every­thing togeth­er. I sug­gest pro­vid­ing your CPA with:

• the com­plete Grantor Trust Tax Infor­ma­tion State­ment, includ­ing all pages and foot­notes;
• any Forms 1099, 1098, or oth­er infor­ma­tion forms includ­ed in the pack­age;
• depre­ci­a­tion and cost-seg­re­ga­tion sched­ules;
• state-spe­cif­ic tax sched­ules or with­hold­ing infor­ma­tion;
• your orig­i­nal DST pur­chase or sub­scrip­tion infor­ma­tion, par­tic­u­lar­ly in the first year;
• pri­or §1031 exchange doc­u­ments and Form 8824 if the DST was acquired as replace­ment prop­er­ty;
• pri­or depre­ci­a­tion and adjust­ed-basis infor­ma­tion relat­ed to the exchange;
• dis­po­si­tion doc­u­ments if the DST prop­er­ty or your indi­vid­ual DST inter­est was sold or oth­er­wise dis­posed of; and
• pri­or-year DST tax pack­ages when your CPA needs to track depre­ci­a­tion, basis, sus­pend­ed loss­es, or oth­er car­ry­for­ward items.

Keep the Pack­age After the Return Is Filed

Your DST tax his­to­ry does not end when the tax return is filed.

If you acquired the DST through a §1031 exchange, your tax his­to­ry may have start­ed long before you invest­ed in that DST. Form 8824 reports the like-kind exchange and helps estab­lish infor­ma­tion regard­ing deferred or rec­og­nized gain and the basis of the replace­ment prop­er­ty.

Years lat­er, those records and depre­ci­a­tion sched­ules may mat­ter again if you com­plete anoth­er §1031 exchange, sell the DST, or need to estab­lish adjust­ed basis.

For that rea­son, I rec­om­mend treat­ing every year’s DST tax pack­age as part of the per­ma­nent tax his­to­ry of the invest­ment, not sim­ply paper­work to dis­card after April 15.

A Sim­ple Rule for DST Investors

If you remem­ber one thing from this arti­cle, make it this:

• Do not try to decide which pages of your DST tax pack­age are impor­tant for your CPA. Send the com­plete pack­age.

You do not need to under­stand every tax rule, depre­ci­a­tion cat­e­go­ry, or report­ing method. But under­stand­ing what you received will help you ask bet­ter ques­tions, main­tain bet­ter records, and work more effec­tive­ly with your tax pro­fes­sion­al.

In Part 2 of our DST.EDU series, we will look more close­ly at:

• Grantor Trust Tax Infor­ma­tion State­ment vs. Sched­ule K‑1 — Under­stand­ing the Dif­fer­ence.

Edu­ca­tion­al Note

This arti­cle is intend­ed sole­ly for gen­er­al edu­ca­tion­al and infor­ma­tion­al pur­pos­es. It is not indi­vid­ual tax, legal, secu­ri­ties, or invest­ment advice. DST tax report­ing can vary by invest­ment, spon­sor, prop­er­ty, report­ing method, and investor cir­cum­stances. Investors should pro­vide their com­plete DST tax pack­age to their CPA or oth­er qual­i­fied tax pro­fes­sion­al and obtain advice based on their indi­vid­ual sit­u­a­tion.

Delaware Statu­to­ry Trusts (DSTs) have become a notable part of com­mer­cial real estate invest­ing. As Al DiNi­co­la empha­sizes, a DST is a struc­ture, not an asset class, the focus should remain on the qual­i­ty of the under­ly­ing prop­er­ty and how it fits your goals.  DSTs are for accred­it­ed investors and car­ry risks, i.e. illiq­uid­i­ty, real estate mar­ket fluc­tu­a­tions, and spon­sor deci­sions. Con­sult your advis­er about suit­abil­i­ty, espe­cial­ly for §1031 exchanges. For more details, please con­tact:

• Al DiNi­co­la adnicola@fiduciarycm.com  
• Direct: 239 691 8098

Advi­so­ry ser­vices are offered through Fidu­cia­ry CM, an SEC-reg­is­tered advis­er. Invest­ments involve risk and are not guar­an­teed. Always refer to offer­ing doc­u­ments for full risk dis­clo­sures. Delaware Statu­to­ry Trust (DST) invest­ments involve risks asso­ci­at­ed with com­mer­cial real estate own­er­ship and are not suit­able for all investors. These risks may include, but are not lim­it­ed to, loss of prin­ci­pal, illiq­uid­i­ty, ten­ant vacan­cy, financ­ing risk, inter­est rate fluc­tu­a­tions, prop­er­ty val­ue declines, eco­nom­ic and mar­ket con­di­tions, and risks asso­ci­at­ed with spon­sor and prop­er­ty man­age­ment deci­sions. Please refer to the applic­a­ble Prop­er­ty Pri­vate Place­ment Mem­o­ran­dum (PPM) for a com­plete dis­cus­sion of the risks and con­sid­er­a­tions spe­cif­ic to that offer­ing. Secu­ri­ties-relat­ed activ­i­ties, where applic­a­ble, are con­duct­ed through the author’s then-cur­rent reg­is­tered bro­ker-deal­er, mem­ber FINRA/SIPC. Cur­rent reg­is­tra­tion infor­ma­tion is avail­able through FINRA Bro­kerCheck. Past per­for­mance is not indica­tive of future results. Nei­ther the Reg­is­tered Rep­re­sen­ta­tive nor the Bro­ker-Deal­er can con­trol or guar­an­tee future deci­sions made by the DST spon­sor, asset man­ag­er, prop­er­ty man­ag­er, ten­ants, lenders, or oth­er third par­ties involved in the oper­a­tion of the prop­er­ty. Past per­for­mance is not indica­tive of future results. For edu­ca­tion­al pur­pos­es only; not tax, legal, secu­ri­ties, or invest­ment advice and not an offer or solic­i­ta­tion to buy or sell secu­ri­ties.