A Delaware Statutory Trust can absolutely be the subject of a cost segregation study, and many DST sponsors commission one when they acquire the property. The reason it works sits in Rev. Rul. 2004-86: a properly structured DST is not taxed as an entity; each investor is treated as owning an undivided interest in the trust's real estate directly. That ruling is what makes DST interests eligible for 1031 exchanges, and it also means each investor reports their proportionate share of rental income and depreciation on their own return.
Who commissions the study
The sponsor typically orders the study when the DST acquires the property and distributes the resulting schedule, or the data needed to build one, to investors. Each investor then applies their percentage. If the sponsor did not order a study, an investor can still have their undivided share screened and studied, because for tax purposes they own real estate, not a security.
The 1031 wrinkle that controls the math
Most DST investors arrive through a 1031 exchange, and that changes what cost segregation can deliver. Under Treas. Reg. 1.168(i)-6, the exchanged basis you carry from the relinquished property keeps depreciating on its old schedule and old recovery life. Only the excess basis, meaning new investment above the carried-over amount, is treated as newly placed in service, takes fresh MACRS lives from the study, and can qualify for bonus depreciation under IRC 168(k), at the permanent 100% rate for interests acquired after January 19, 2025 per the One Big Beautiful Bill Act. Carryover basis is excluded from bonus by IRC 168(k)(2)(E)(ii). An investor who carried a large exchanged basis and added little new money will see a modest cost segregation benefit; a cash investor gets the full effect.
DST restrictions do not block a study
DSTs operate under tight limits, often summarized as prohibitions on accepting new capital, renegotiating debt, and redeveloping the property. A cost segregation study is a tax analysis of assets that already exist. It changes nothing physical and takes in no capital, so it does not conflict with those restrictions.
State and exit considerations
The property sits in a specific state, so nonresident filing duties and that state's bonus conformity apply to every investor. On a future sale, each investor's share of section 1245 recapture on short-life property is ordinary income, and unrecaptured section 1250 gain on the building is taxed at up to 25%, unless the gain is deferred again through another 1031 exchange.
Where Amadae fits
Amadae screens a DST investor's share, models the split between exchanged basis on the old schedule and excess basis eligible for bonus, prepares the Form 3115 with a section 481(a) catch-up when prior-year depreciation was computed on the wrong lives, and files the returns that report the DST share across the relevant states. The screen is a modeling estimate, not an engineering study; engineering work comes from a study firm Amadae coordinates with.