A deferred exchange occurs when a property with a capital gain is sold and replaced with a like-kind property using a 1031 exchange to defer the payment of any capital gains tax owed.
A Delaware Statutory Trust (DST) is a separate legal entity under Delaware law. When structured for a 1031 exchange, the Trust owns the property and each investor is entitled to receive a pro rate share of property income and depreciation…
A transaction or situation which causes the taxes on the profits of gains made on a capital investment to be deferred to a later date.
1031 Exchange Rules
- Property must be like-kind real estate
- Real estate must be used for investment or business, and not be considered stock in trade or personal property
- Property replaced must be of equal or greater value to the property being relinquished
- Boot must not be received by the seller
- Title of the relinquished property and the replacement property must be in the same taxpayer name
- Replacement property must be identified within 45 days of closing on the sale of the relinquished property
- Replacement property must be purchased within 180 days of closing on the sale of the relinquished property.