What is the purpose of Delaware's Real Estate Tax Return Declaration of Estimated Income Tax, Form 5403?

The purpose of Delaware's Real Estate Tax Return Declaration of Estimated Income Tax, Form 5403, is to ensure that property sellers pay income tax on capital gains derived from the sale of their real estate. This form is a mechanism for the state to collect tax on potential gains realized from real estate transactions, which could otherwise go unreported. By requiring sellers to declare estimated income tax, the state actively monitors and ensures compliance with tax obligations related to real estate sales, helping to maintain the integrity of tax collection.

In the context of the other choices, double taxation on capital gains would not be an appropriate or legal purpose of the tax return form. Promoting out-of-state investors does not align with the primary function of the form, which is tax compliance rather than investment encouragement. Similarly, restricting unincorporated entities from purchasing property is unrelated to the form's purpose, as it focuses on tax reporting and obligations rather than limiting ownership. These distinctions highlight why ensuring property sellers pay income tax on capital gains is the correct interpretation of the form’s role in Delaware’s real estate process.