1031 Exchange · Phoenix

1031 Exchange in Phoenix, AZ

Phoenix's run-up in values has many owners deferring gains into passive, diversified DSTs.

$411,000Median value

-2.4%Year-over-year

5.0–6.0%Illustrative cap rate

Deferring the tax on a Phoenix sale

A 1031 exchange lets Phoenix investors sell appreciated real estate and reinvest into like-kind replacement property — commonly a Delaware Statutory Trust — deferring federal and Arizona capital-gains tax while moving from active landlording to passive, institutional real estate.

Frequently asked questions

What is the capital gains tax rate in Arizona?

Arizona taxes capital gains as ordinary income, up to 2.5%, with no separate long-term rate. Combined with the federal 20% rate and the 3.8% net investment income tax, a high-bracket Arizona seller can face roughly ~26.3% on a real estate gain.

Does Arizona recognize 1031 exchanges?

Yes. Arizona conforms to IRC §1031, so a properly structured exchange defers Arizona tax as well as federal tax.

Why use a 1031 exchange in Arizona?

To defer the tax on a large gain (up to about ~26.3% combined) and move from active landlording into passive, professionally managed real estate while keeping your full equity invested. These are Regulation D offerings for accredited investors.

Considering a 1031 exchange in Phoenix?Talk to an advisor