For Appreciated Land
Defer the tax. Keep the equity working.
A 1031 exchange into a Delaware Statutory Trust defers federal capital gains, NIIT, state capital gains, and depreciation recapture. Held until death, your heirs' stepped-up basis can wipe out the deferred tax entirely.
The Four Taxes
Most landowners only see one of them coming.
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Federal Capital Gains
15% at lower gain levels, then the top federal rate of 20% once the gain clears a threshold that adjusts each year. Most ranch sales clear it easily.
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Net Investment Income Tax (NIIT)
Additional 3.8% surtax. Applies to households over $250K, almost any landowner having a sale year.
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State Capital Gains
0% in Texas, Wyoming, Florida, Tennessee, Nevada, and South Dakota. Washington now levies a 7% capital gains excise tax on large gains. Up to 13.3% in California. See your state's rate.
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Depreciation Recapture
Up to 25% federal on every dollar of past depreciation taken, equipment, irrigation, improvements. Hits long-time landowners hardest.
DST Brochure