What Are The 1031 Exchange Rules In Delaware?

Delaware seems to be the perfect combination of appreciation, return, and safety. There are enough reasons to substantiate that. Check out the top reasons that make choosing a replacement property in Delaware for a 1031 Exchange a very lucrative deal –

Why Do A 1031 Exchange In Delaware?

• Assured rent by local US government, making it a safe investment option.
• House prices in Delaware are one of the most inexpensive in the country since the last recession.
• Huge potential for appreciation since Delaware housing hit lowest in 2012 and now continues to rise.
• You can get a much higher return on investment due to low house prices since 2007 and stable rental rates with government housing demand.
• Delaware also has the lowest property holding costs such as repairs, insurance, and property tax.
• ZERO Sales Tax on goods and services for anything purchased in Delaware.
• The cost of living in Delaware is meagre if compared to any other state, attracting lots of students from local and around the world.
• Delaware guarantees a better living environment as it’s far enough from the city pollution, yet close enough for sufficient employment opportunities.
• Delaware has seen a considerable increase in cash buyer activity over the last six years.

1031 Exchange Rules In Delaware

Before opting for a 1031 Exchange in Delaware, you should know the basics. 1031 Exchange allows an investor to trade property and reinvest the gains in a brand-new property and defer all capital gain taxes.

A Delaware Statutory Trust (DST) is basically a business trust created under Delaware law. It can be used in diverse forms of business settings. DSTs have become very popular as pass-through entities for holding commercial real estate assets for investors.

Upon the sale of a property in a DST, the investor gets the privilege to defer any capital gains tax or pay any capital gains tax by participating in a 1031 exchange.

Section 1031 of the Internal Revenue Code allows an investor to defer the payment of capital gains taxes that may crop up from the sale of a commercial or investment property. By investing the proceeds of the sale in a “like-kind” DST real estate investment,  real estate taxes may be deferred as long as the investor meets specific requirements.  Here’s a quick step by step explanation of a 1031 exchange:

Step 1

• The property, also known as the relinquished property, is first sold by the exchanger, and proceeds are then escrowed with a Qualified Intermediary (QI).

Step 2

• A Qualified Intermediary, transfers funds for the purchase of replacement property through a written agreement with the investor.

Step 3

• Exchanger receives his new property (or DST interest).

Allow Our Experts to Manage a Successful 1031 Exchange in Delaware for You

The process of 1031 exchange in Delaware is extremely complex in nature. We at 1031xchange have expert advisors with extensive experience in handling highly profitable exchanges for our diverse client base. To know more about 1031 exchange in Delaware call – 888-993-2835 or email us at info@1031xchange.com.