--- title: Is a 721 UPREIT Right for You? Benefits, Drawbacks, and Who Should Consider It description: Explore the benefits and drawbacks of a 721 UPREIT for real estate owners considering a transition from property management to diversified investments. image: https://blog.wealthstonegroup.com/hubfs/aditya-vyas-mHdATQY9fIU-unsplash.jpeg --- - Client Portal [![Gold-Logo-1](https://blog.wealthstonegroup.com/hs-fs/hubfs/Gold-Logo-1.png?width=2000&height=380&name=Gold-Logo-1.png "Gold-Logo-1")](https://www.wealthstonegroup.com/) [![Wealthstone-logo-gold](https://blog.wealthstonegroup.com/hs-fs/hubfs/Gold-Logo-1.png?width=2000&height=380&name=Gold-Logo-1.png "Wealthstone-logo-gold")](https://blog.wealthstonegroup.com/) - [About](https://www.wealthstonegroup.com/about) - [Real Estate](https://www.wealthstonegroup.com/real-estate) - [1031 Exchanges](https://www.wealthstonegroup.com/real-estate/1031-exchanges) - [1033 Exchanges](https://www.wealthstonegroup.com/real-estate/1033-exchanges) - [721 Exchanges](https://www.wealthstonegroup.com/real-estate/721-exchanges) - [Delaware Statutory Trusts](https://www.wealthstonegroup.com/real-estate/delaware-statutory-trusts) - [Qualified Opportunity Zones](https://www.wealthstonegroup.com/real-estate/qualified-opportunity-zones) - [Private Real Estate Investments](https://www.wealthstonegroup.com/real-estate/private-real-estate-investments) - [Wealth Management](https://www.wealthstonegroup.com/services) - [Investment Management](https://www.wealthstonegroup.com/services/investment-management) - [Alternative Investments](https://www.wealthstonegroup.com/services/alternative-investments) - [Retirement Income](https://www.wealthstonegroup.com/services/retirement-income) - [Tax Mitigation](https://www.wealthstonegroup.com/services/tax-mitigation) - [Wealth Preservation](https://www.wealthstonegroup.com/services/wealth-preservation) - [Business Exit Planning & ESOPs](https://www.wealthstonegroup.com/services/business-exit-planning-esops) - Resources - [Insights](https://blog.wealthstonegroup.com/insights) - [Commentary](https://blog.wealthstonegroup.com/commentary) - [Library](https://www.wealthstonegroup.com/library) - [Events](https://blog.wealthstonegroup.com/events) - [Videos](https://www.wealthstonegroup.com/videos) - [Contact](https://www.wealthstonegroup.com/contact) [![View Properties](https://no-cache.hubspot.com/cta/default/44709168/47dd736a-2645-40ed-92a8-f366b8bf509e.png)](https://cta-redirect.hubspot.com/cta/redirect/44709168/47dd736a-2645-40ed-92a8-f366b8bf509e) [Schedule a Call](https://www.wealthstonegroup.com/schedule-a-call) [![View Properties](https://no-cache.hubspot.com/cta/default/44709168/47dd736a-2645-40ed-92a8-f366b8bf509e.png)](https://cta-redirect.hubspot.com/cta/redirect/44709168/47dd736a-2645-40ed-92a8-f366b8bf509e) [Schedule a Call](https://www.wealthstonegroup.com/schedule-a-call) - [About](https://www.wealthstonegroup.com/about) - [Real Estate](https://www.wealthstonegroup.com/real-estate) - [1031 Exchanges](https://www.wealthstonegroup.com/real-estate/1031-exchanges) - [1033 Exchanges](https://www.wealthstonegroup.com/real-estate/1033-exchanges) - [721 Exchanges](https://www.wealthstonegroup.com/real-estate/721-exchanges) - [Delaware Statutory Trusts](https://www.wealthstonegroup.com/real-estate/delaware-statutory-trusts) - [Qualified Opportunity Zones](https://www.wealthstonegroup.com/real-estate/qualified-opportunity-zones) - [Private Real Estate Investments](https://www.wealthstonegroup.com/real-estate/private-real-estate-investments) - [Wealth Management](https://www.wealthstonegroup.com/services) - [Investment Management](https://www.wealthstonegroup.com/services/investment-management) - [Alternative Investments](https://www.wealthstonegroup.com/services/alternative-investments) - [Retirement Income](https://www.wealthstonegroup.com/services/retirement-income) - [Tax Mitigation](https://www.wealthstonegroup.com/services/tax-mitigation) - [Wealth Preservation](https://www.wealthstonegroup.com/services/wealth-preservation) - [Business Exit Planning & ESOPs](https://www.wealthstonegroup.com/services/business-exit-planning-esops) - Resources - [Insights](https://blog.wealthstonegroup.com/insights) - [Commentary](https://blog.wealthstonegroup.com/commentary) - [Library](https://www.wealthstonegroup.com/library) - [Events](https://blog.wealthstonegroup.com/events) - [Videos](https://www.wealthstonegroup.com/videos) - [Contact](https://www.wealthstonegroup.com/contact) [![View Properties](https://no-cache.hubspot.com/cta/default/44709168/47dd736a-2645-40ed-92a8-f366b8bf509e.png)](https://cta-redirect.hubspot.com/cta/redirect/44709168/47dd736a-2645-40ed-92a8-f366b8bf509e)[Schedule a Call](https://www.wealthstonegroup.com/schedule-a-call) Insights #### Share this [Share on X](https://x.com/intent/post?url=https://blog.wealthstonegroup.com/insights/is-a-721-upreit-right-for-you-benefits-drawbacks-and-who-should-consider-it&text=Is+a+721+UPREIT+Right+for+You%3F+Benefits%2C+Drawbacks%2C+and+Who+Should+Consider+It) [Share on Facebook](https://www.facebook.com/sharer/sharer.php?u=https://blog.wealthstonegroup.com/insights/is-a-721-upreit-right-for-you-benefits-drawbacks-and-who-should-consider-it&t=Is+a+721+UPREIT+Right+for+You%3F+Benefits%2C+Drawbacks%2C+and+Who+Should+Consider+It) [Share on LinkedIn](https://www.linkedin.com/shareArticle?mini=true&url=https://blog.wealthstonegroup.com/insights/is-a-721-upreit-right-for-you-benefits-drawbacks-and-who-should-consider-it&t=Is+a+721+UPREIT+Right+for+You%3F+Benefits%2C+Drawbacks%2C+and+Who+Should+Consider+It) # Is a 721 UPREIT Right for You? Benefits, Drawbacks, and Who Should Consider It by [**Paulo Aguilar, CFA, CAIA**](https://blog.wealthstonegroup.com/insights/author/paulo-aguilar) on Nov 09, 2026 For real estate owners who have spent decades building wealth through investment properties, there often comes a point when the responsibilities of ownership become less appealing. Managing tenants, overseeing maintenance, and making financing decisions may no longer fit their lifestyle or retirement plans. Selling the property outright can create another challenge: substantial capital gains and depreciation-related taxes that reduce the proceeds available for reinvestment. A [721 UPREIT](https://www.wealthstonegroup.com/real-estate/721-exchanges)may provide an alternative. It allows qualifying real estate interests to be contributed to a REIT's operating partnership in exchange for operating partnership units (OP units), generally without immediately recognizing the embedded taxable gain. For many individual investors, this transition begins with a 1031 exchange into a Delaware Statutory Trust (DST) structured for a potential future 721 UPREIT. But the strategy is not appropriate for everyone. Its suitability depends on an investor's income needs, liquidity expectations, estate-planning objectives, and willingness to give up control over individual properties. ## Who Might Benefit From a 721 UPREIT? A 721 UPREIT is often worth considering for investors who have accumulated substantial appreciation in their real estate and want to change how they own those investments without immediately recognizing the deferred gain. Several circumstances can make the strategy particularly relevant. - **Investors ready to transition away from active property ownership.** After years of managing rental properties, some owners want to eliminate the responsibilities associated with tenants, maintenance, leasing, and capital improvements. A 721 UPREIT can provide continued real estate exposure through professional management. - **Investors seeking greater diversification.** Someone whose real estate wealth is concentrated in a single apartment building or commercial property may eventually gain exposure to a broader portfolio through a REIT. This can reduce dependence on one property's performance, although diversification does not eliminate investment risk. - **Investors interested in potential liquidity over time.** Depending on the REIT's structure, OP units may eventually become redeemable or convertible into REIT shares. This can create opportunities to access portions of an investment rather than relying on the eventual sale of an entire property. However, redemption rights, holding periods, and other restrictions must be carefully evaluated. - **Investors incorporating real estate into their estate plans.** For owners with substantial unrealized gains, continuing tax deferral while transitioning into a more divisible ownership structure may simplify how real estate wealth is eventually transferred to beneficiaries. These benefits are most meaningful when they support an investor's broader financial objectives rather than simply providing another way to defer taxes. > A 721 UPREIT is often most relevant when an investor wants to change how they own real estate, not necessarily whether they own it. ## When Might a 721 UPREIT Be the Wrong Choice? The same structural features that make a 721 UPREIT attractive to some investors can make it unsuitable for others. Investors who value direct control over their properties may find the transition restrictive. Once the investment moves into a REIT's operating partnership, decisions involving acquisitions, financing, property management, and dispositions generally rest with the REIT's management team. Liquidity is another important consideration. Although some REIT structures provide opportunities for future redemptions or conversions, investors should not assume they can access their capital whenever they choose. Restrictions may apply, and the availability of liquidity can depend on the REIT's financial condition and governing documents. The loss of future 1031 exchange flexibility is equally important. With a traditional DST, investors may be able to complete another 1031 exchange when the underlying property is sold. Following a 721 transaction, however, the investor generally holds partnership interests rather than qualifying real estate. Because partnership interests are not eligible for Section 1031 treatment, investors generally cannot exchange their OP units into another investment property through a subsequent 1031 exchange. For someone who expects to continue acquiring and exchanging individual properties, that limitation may outweigh the potential benefits. Finally, investors must be comfortable with the REIT itself. Its portfolio composition, leverage, management team, fees, distribution coverage, and financial condition will influence the investment's long-term performance. ## How Can a 721 UPREIT Help With Estate Planning? Consider an investor who owns a $10 million apartment building and has three children. One child wants to remain invested in real estate. Another prefers passive income without property management responsibilities. The third would eventually like access to their inheritance. Keeping the building in the family may require the children to coordinate decisions involving management, financing, and an eventual sale, despite having different objectives. A DST can already provide divisible ownership interests, but a future 721 UPREIT may introduce additional flexibility. If the investment transitions into OP units, each beneficiary may eventually hold an individual interest in the operating partnership. Depending on the REIT's terms, one heir might remain invested while another pursues liquidity when permitted. There may also be tax-planning advantages. Under current federal tax law, qualifying inherited assets may receive an adjustment in tax basis at death. Depending on the circumstances, inherited OP units may qualify for this treatment, potentially reducing or eliminating previously deferred gain for income-tax purposes. However, estate taxes, ownership structures, redemption restrictions, and the individual circumstances of beneficiaries can materially affect the outcome. The objective is not simply to transfer wealth, but to provide heirs with an ownership structure that may better accommodate their different financial needs. > Estate planning isn't only about what heirs inherit. It's also about the decisions they'll be able to make independently after receiving that inheritance. ## How to Choose the Right Approach for Your Situation Before pursuing a 721 UPREIT, investors should consider what they ultimately want their real estate wealth to accomplish. For someone approaching retirement, the priorities may include reliable income, fewer management responsibilities, diversification, and potential access to capital over time. For another investor, maintaining control over individual properties and preserving the ability to complete future 1031 exchanges may be more important. The analysis should also extend beyond the initial DST investment. When entering a DST structured for a potential 721 transaction, investors should evaluate the REIT they may eventually own, including its portfolio, leverage, distribution sustainability, fees, and liquidity provisions. The anticipated 721 transaction itself is not guaranteed. The timing, terms, and completion of a future acquisition depend on the offering structure and the parties involved. A thoughtful decision therefore requires evaluating both the immediate investment and the potential long-term ownership structure. ## Conclusion A 721 UPREIT can provide a pathway for real estate owners to transition away from direct property ownership while continuing to defer taxes and maintain exposure to professionally managed real estate. For the right investor, potential benefits include diversification, reduced management responsibilities, future liquidity opportunities, and greater estate-planning flexibility. However, those benefits come with meaningful trade-offs, including limited control, liquidity restrictions, investment risk, and the potential loss of future 1031 exchange flexibility. The decision ultimately depends on how an investor wants to own real estate going forward and whether the REIT structure supports their long-term financial plan. *General Disclosure* *This material is provided for informational and educational purposes only and is based on information from sources we believe to be reliable. However, its accuracy is not guaranteed, and it is not intended to be the sole basis for investment decisions or to meet specific investment needs.* *Wealthstone Group does not offer tax or legal advice. This content should not replace professional advice tailored to your individual situation.* *Not an offer to buy, nor a solicitation to sell securities. All investing involves risk of loss of some or all principal invested. Past performance is not indicative of future results. Speak to your finance and/or tax professional prior to investing. Any information provided is for informational purposes only. Securities offered through Arkadios Capital, member FINRA/SIPC. Advisory Services offered through Arkadios Wealth. Wealthstone Group and Arkadios are not affiliated through any ownership.* Topics: [721 Exchange / UPREIT](https://blog.wealthstonegroup.com/insights/tag/721-exchange-upreit) #### Share this [Share on X](https://x.com/intent/post?url=https://blog.wealthstonegroup.com/insights/is-a-721-upreit-right-for-you-benefits-drawbacks-and-who-should-consider-it&text=Is+a+721+UPREIT+Right+for+You%3F+Benefits%2C+Drawbacks%2C+and+Who+Should+Consider+It) [Share on Facebook](https://www.facebook.com/sharer/sharer.php?u=https://blog.wealthstonegroup.com/insights/is-a-721-upreit-right-for-you-benefits-drawbacks-and-who-should-consider-it&t=Is+a+721+UPREIT+Right+for+You%3F+Benefits%2C+Drawbacks%2C+and+Who+Should+Consider+It) [Share on LinkedIn](https://www.linkedin.com/shareArticle?mini=true&url=https://blog.wealthstonegroup.com/insights/is-a-721-upreit-right-for-you-benefits-drawbacks-and-who-should-consider-it&t=Is+a+721+UPREIT+Right+for+You%3F+Benefits%2C+Drawbacks%2C+and+Who+Should+Consider+It) - Recent - Topics - Archive Recent Topics - [1031 Exchange (74)](https://blog.wealthstonegroup.com/insights/tag/1031-exchange) - [Delaware Statutory Trusts (DSTs) (45)](https://blog.wealthstonegroup.com/insights/tag/delaware-statutory-trusts-dsts) - [Tax Mitigation (39)](https://blog.wealthstonegroup.com/insights/tag/tax-mitigation) - [Wealth & Estate Planning (24)](https://blog.wealthstonegroup.com/insights/tag/wealth-estate-planning) - [Business Exit Planning (20)](https://blog.wealthstonegroup.com/insights/tag/business-exit-planning) - [721 Exchange / UPREIT (19)](https://blog.wealthstonegroup.com/insights/tag/721-exchange-upreit) - [REIT (10)](https://blog.wealthstonegroup.com/insights/tag/reit) - [Passive Real Estate Investing (7)](https://blog.wealthstonegroup.com/insights/tag/passive-real-estate-investing) - [Qualified Opportunity Zones (QOZs) (5)](https://blog.wealthstonegroup.com/insights/tag/qualified-opportunity-zones-qozs) See all Archive - [November 2026 (3)](https://blog.wealthstonegroup.com/insights/archive/2026/11) - [October 2026 (13)](https://blog.wealthstonegroup.com/insights/archive/2026/10) - [September 2026 (13)](https://blog.wealthstonegroup.com/insights/archive/2026/09) - [August 2026 (13)](https://blog.wealthstonegroup.com/insights/archive/2026/08) - [July 2026 (12)](https://blog.wealthstonegroup.com/insights/archive/2026/07) - [June 2026 (13)](https://blog.wealthstonegroup.com/insights/archive/2026/06) - [May 2026 (13)](https://blog.wealthstonegroup.com/insights/archive/2026/05) - [April 2026 (13)](https://blog.wealthstonegroup.com/insights/archive/2026/04) - [March 2026 (11)](https://blog.wealthstonegroup.com/insights/archive/2026/03) - [February 2026 (15)](https://blog.wealthstonegroup.com/insights/archive/2026/02) - [January 2026 (4)](https://blog.wealthstonegroup.com/insights/archive/2026/01) - [December 2025 (4)](https://blog.wealthstonegroup.com/insights/archive/2025/12) - [November 2025 (2)](https://blog.wealthstonegroup.com/insights/archive/2025/11) - [October 2025 (4)](https://blog.wealthstonegroup.com/insights/archive/2025/10) - [September 2025 (1)](https://blog.wealthstonegroup.com/insights/archive/2025/09) - [August 2025 (5)](https://blog.wealthstonegroup.com/insights/archive/2025/08) - [July 2025 (4)](https://blog.wealthstonegroup.com/insights/archive/2025/07) - [June 2025 (2)](https://blog.wealthstonegroup.com/insights/archive/2025/06) - [May 2025 (5)](https://blog.wealthstonegroup.com/insights/archive/2025/05) - [April 2025 (3)](https://blog.wealthstonegroup.com/insights/archive/2025/04) - [March 2025 (6)](https://blog.wealthstonegroup.com/insights/archive/2025/03) - [February 2025 (5)](https://blog.wealthstonegroup.com/insights/archive/2025/02) - [January 2025 (3)](https://blog.wealthstonegroup.com/insights/archive/2025/01) - [October 2024 (1)](https://blog.wealthstonegroup.com/insights/archive/2024/10) - [September 2024 (3)](https://blog.wealthstonegroup.com/insights/archive/2024/09) - [August 2024 (4)](https://blog.wealthstonegroup.com/insights/archive/2024/08) - [July 2024 (5)](https://blog.wealthstonegroup.com/insights/archive/2024/07) - [June 2024 (4)](https://blog.wealthstonegroup.com/insights/archive/2024/06) - [May 2024 (5)](https://blog.wealthstonegroup.com/insights/archive/2024/05) - [April 2024 (5)](https://blog.wealthstonegroup.com/insights/archive/2024/04) See all ### Subscribe by email ![Wealthstone-Logo-GoldWhite-2-1](https://blog.wealthstonegroup.com/hs-fs/hubfs/Wealthstone-Logo-GoldWhite-2-1.png?width=50&height=50&name=Wealthstone-Logo-GoldWhite-2-1.png) Wealthstone Group is a wealth management firm focused on providing investment and financial guidance for successful business owners, real estate investors and affluent individuals. [Real Estate](https://www.wealthstonegroup.com/real-estate) - [1031 Exchanges](https://www.wealthstonegroup.com/real-estate/1031-exchanges) - [1033 Exchanges](https://www.wealthstonegroup.com/real-estate/1033-exchanges) - [721 Exchanges](https://www.wealthstonegroup.com/real-estate/721-exchanges) - [Delaware Statutory Trusts](https://www.wealthstonegroup.com/real-estate/delaware-statutory-trusts) - [Qualified Opportunity Zones](https://www.wealthstonegroup.com/real-estate/qualified-opportunity-zones) - [Private Real Estate](https://www.wealthstonegroup.com/real-estate/private-real-estate-investments) [Wealth Management](https://www.wealthstonegroup.com/services) - [Investment Management](https://www.wealthstonegroup.com/services/investment-management) - [Alternative Investments](https://www.wealthstonegroup.com/services/alternative-investments) - [Retirement Income](https://www.wealthstonegroup.com/services/retirement-income) - [Tax Mitigation](https://www.wealthstonegroup.com/services/tax-mitigation) - [Wealth Preservation](https://www.wealthstonegroup.com/services/wealth-preservation) - [Business Exit Planning & ESOPs](https://www.wealthstonegroup.com/services/business-exit-planning-esops) Resources - [Insights](https://blog.wealthstonegroup.com/insights) - [Commentary](https://blog.wealthstonegroup.com/commentary) - [Library](https://www.wealthstonegroup.com/library) - [Events](https://blog.wealthstonegroup.com/events) - [Videos](https://www.wealthstonegroup.com/videos) Company - [About](https://blog.wealthstonegroup.com/about) - [Contact](https://www.wealthstonegroup.com/contact) - [Schedule a Call](https://www.wealthstonegroup.com/schedule-a-call) Not an offer to buy, nor a solicitation to sell securities. All investing involves risk of loss of some or all principal invested. Past performance is not indicative of future results. Speak to your finance and/or tax professional prior to investing. Any information provided is for informational purposes only. Securities offered through Arkadios Capital, member FINRA/SIPC. Advisory Services offered through Arkadios Wealth. Wealthstone Group and Arkadios are not affiliated through any ownership. Check the background of this firm/advisor on [FINRA’s BrokerCheck](https://d5fymz04.na1.hs-sales-engage.com/Ctc/5H+23284/d5fYmz04/JkM2-6qcW6N1vHY6lZ3mYN4pK6WlBkpFCW7v0sYg2_wv5_W7ZC5_p9lMpV9N2mLYb3b1Kt3W19_SZt6-rMHvW8_x-wq4sYh1TW4XJbzr2-1sSdVL3HsH3txppfW1K-Z1Q56Lnk2W3s3crW4kSJHHW6241wl4TBfLgW4z17F_4Rzl4pVgZ43M7sNPmVN4mVB-08Rc3zW828Gqx6r8n-YW21lDn24045sWW3wDlGS3pQbHvW1p_B9Z2DSvXwW5mgq3g7XcLCGW6KxHb21y0S0CW39tHnF3KF-sqW72ntxK15y1kXf3wyRhz04). Copyright © 2026 Wealthstone Group. [Privacy Policy](https://www.wealthstonegroup.com/privacy-policy) | [Terms of Service](https://www.wealthstonegroup.com/terms-of-service) Please click on the buttons below to view your client portal. [Right Capital – Financial Planning](https://app.rightcapital.com/account/login)[Black Diamond – Portfolio Management Reporting](https://login.bdreporting.com/Auth/SignIn) ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Paulo Aguilar, CFA, CAIA", "url" : "https://blog.wealthstonegroup.com/insights/author/paulo-aguilar" }, "dateModified" : "2026-11-09T14:00:03.040Z", "datePublished" : "2026-11-09T14:00:03.000Z", "headline" : "Is a 721 UPREIT Right for You? Benefits, Drawbacks, and Who Should Consider It", "image" : [ "https://blog.wealthstonegroup.com/hubfs/aditya-vyas-mHdATQY9fIU-unsplash.jpeg" ], "mainEntityOfPage" : { "@id" : "https://blog.wealthstonegroup.com/insights/is-a-721-upreit-right-for-you-benefits-drawbacks-and-who-should-consider-it", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://blog.wealthstonegroup.com/hubfs/Gold-Logo-1.png" }, "name" : "Wealthstone Group" } } ``` ```json { "@context" : "https://schema.org", "@type" : "FAQPage", "mainEntity" : [ { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "A 721 UPREIT is worth considering for investors with substantial accumulated appreciation who want to transition away from active property management, seek greater portfolio diversification, are interested in potential future liquidity through OP unit redemptions, or want to simplify how real estate wealth transfers to heirs with different financial needs." }, "name" : "Who might benefit from a 721 UPREIT?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "A 721 UPREIT may not be appropriate for investors who value direct control over their properties, have near-term liquidity needs, or want to preserve the ability to complete future 1031 exchanges. Once property is contributed to a REIT's operating partnership, decisions over acquisitions, management, and dispositions rest with the REIT's management team, and OP units are generally not eligible for Section 1031 treatment." }, "name" : "When might a 721 UPREIT be the wrong choice?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "Following a 721 transaction, investors generally hold partnership interests rather than qualifying real estate. Because partnership interests are not eligible for Section 1031 treatment, investors generally cannot exchange their OP units into another investment property through a subsequent 1031 exchange. For investors who plan to continue acquiring and exchanging individual properties, this limitation may outweigh the potential benefits." }, "name" : "What happens to my ability to do future 1031 exchanges after a 721 UPREIT?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "A 721 UPREIT can provide heirs with a more divisible ownership structure. Depending on the REIT's terms, each beneficiary may eventually hold an individual interest in the operating partnership, allowing one heir to remain invested while another pursues liquidity when permitted. Under current federal tax law, inherited OP units may also qualify for a step-up in tax basis at death, potentially reducing or eliminating previously deferred gain for income-tax purposes, though individual circumstances and estate taxes can materially affect the outcome." }, "name" : "How can a 721 UPREIT help with estate planning?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "Investors should evaluate both the immediate DST investment and the REIT they may eventually own, including its portfolio composition, leverage, distribution sustainability, fees, and liquidity provisions. The anticipated 721 transaction itself is not guaranteed — its timing, terms, and completion depend on the offering structure and the parties involved." }, "name" : "What should investors evaluate before entering a DST structured for a potential 721 UPREIT?" } ] } ```