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Understanding tax-deferred real estate exchanges

If you are preparing to engage in a real estate transaction in Delaware, you will likely find that the process is extremely complicated, regardless of whether it involves a large commercial transaction, a residential property held for investment purposes or a property held for business or trade purposes. It will be important for you to understand all of the legal and tax issues that may potentially arise so that your interests will be protected.

When you plan to sell a qualifying property that you currently own and then use those proceeds to invest in a different one, you may be able to avoid capital gains taxes if you structure the transaction correctly. An exchange of property pursuant to Section 1031 of the Internal Revenue Code may allow you to defer the capital gains taxes that you would otherwise incur through the sale of your investment or business property.

You will want to think about your goals and then determine how to best structure your transaction. A properly structured 1031 exchange will require you to conduct the transaction at the appropriate time and complete the legal documentation appropriately. If you do it correctly, then you can potentially save yourself thousands of dollars.

At our firm, our attorneys work closely with our real estate clients to help them structure their deals in ways that will best protect their financial interests. We understand the complexities involved with commercial real estate transactions, and we work to help our clients navigate the difficult processes. We help our clients complete both large and small real estate transactions in the most efficient ways possible. Our attorneys regularly assist our clients with identifying their goals and completing exchanges so that they can defer their capital gains taxes through their sales and purchases. If you would like more information about these matters, you may want to review the information on our tax-deferred exchange page.

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