Interesting facts people do not know about Delaware Statutory Trust
Have you heard of the 1031 exchange method? It is a good idea when you want to change your investment property without paying taxes. You already know that when you sell a property, you have to pay a certain percentage as a gain tax, but if you use this method, you have the possibility to maximize your profit, by changing the investment property with one that suits your needs, without paying a single penny. There are many delaware statutory trust advantages, but this does not mean that you do not have to act cautiously, because new regulations appear every day, and if you do not work in the domain, you may not be aware of them. It is recommended to ask for the assessment of a professional in the domain, because they will offer the assistance you need, and they will provide you all the required information.
Experts help you conduct an exchange smoothly
People have the misconception that they can do the job without having to pay an expert, because it cannot be difficult to exchange a property for another. Actually, you might meet many problems if you do not ask the help of an expert. A specialist will not only help you understand what the entire process implies, but they will also guarantee you that there are not made mistakes during the process. Before starting to conduct the swap make sure, you get in touch with all the experts who will have to assist you during the process.
It is crucial to work only with qualified intermediaries
You should sign an exchange agreement only with a qualified intermediary, because this is the only way to avoid having issues during the swap. It is crucial to work with an intermediary, because you are not allowed to control the funds you receive from the sale of your space. If you receive the money, the IRS will consider the action as a sale and you will have to pay taxes.
How to choose the property you want to acquire
The property you will acquire is called replacement property, and you will have to make sure that you find one in the United States. You have 45 days to find the property you want to swap yours for, sign the documents and inform your intermediary. You have the possibility to identify a maximum of three potential replacement properties. The condition is that the properties you identify to not exceed 200% of the sale value of your space. It is essential as the replacement property to be listed at a price equal or higher than your space, because this is a condition for tax-deferral. In case, you opt for a real estate replacement property, then you will have to offer complete details about it, as the street address and name. You have to make sure that it not pass more than 180 days from the moment, when you sell your relinquished property, until you close the deal for the replacement one.