For those real estate investors who want to move their investment in physical  real estate to the easier passive world of real estate investment trusts (REIT), there is an unfortunate tax hit awaiting them. Using a 1031 exchange is not an option available to you. The IRS views REITs as securities, not real estate, and therefore 1031 exchanges do not apply. An UPREIT and Section 721 can prove to be a tax-savvy tool to turn real estate into better giving.

For those who want to exit the “landlord” business without a tax hit , using a Delaware statutory trust (DST) is ideal. If you are someone whose real estate holdings were tied up in a real estate investment trust (REIT), you may find your path toward charitable giving far easier to travel.