Internal Revenue Ruling 2004-86, which addresses whether the DST structure can work for a 1031 Exchange, has prohibitions, which have become know as the "seven deadly sins." They are:

1. Once the offering is closed, there can be no future contribution to the DST by either current or new beneficiaries.
2. The trustee cannot renegotiate the terms of the existing loans, nor can it borrow any new funds from any party.
3. The trustee cannot reinvest the proceeds from the sale of its real estate.
4. The trustee is limited to making capital expenditures with respect to the property to those for a. Normal repair and maintenance, b. Minor non-structural capital improvements, and c. Those required by law.
5. Any cash held between distribution dates can only be invested in short-term debt obligations.
6. All cash, other than necessary reserves, must be distributed on a current basis.
7. The trustee cannot enter into new leases or renegotiate the current leases.