1. In order for properties to qualify for a "like-kind" exchange, they must be: 

a. Located within the same state
b. The same category of real estate, such as commercial or residential
c. Any type of real estate, as long as it's used as an investment or for business
d. Any type of real estate, with the exception of raw land 
 
2. To defer capital gains taxes, the replacement property you choose must:

a.  Be of equal or greater value than the property you sold
b.  Be worth less than the property you sold
c.  Be worth no greater than 5 percent more than the property you sold
d.  Be of any value; no reinvestment requirement exists to defer taxes
   
3. How many days from the closing date of your property's sale do you have to
identify a replacement property?:

a.  30 days
b.  45 days
c.  180 days
d.  365 days
   
4. How many days from the closing date of your property's sale do you have to actually
purchase a replacement property?:

a.  45 days
b.  180 days
c.  250 days
d.  365 days
 
5. Which of the following purchases would qualify for a 1031 exchange?:

a.    A $100,000 savings bond
b.   20 percent interest in a business partnership that owns real estate
c.   300 shares of IBM stock
d.   50 percent undivided interest as a tenant-in-common in real estate
 
 
6. Which of the following purchases would not qualify as a like-kind exchange?:

a.  Farmland held as an investment
b.  An office property used for business
c.  A duplex used for your personal residence
d.  A vacation home held as an investment
 

7. Which of the following is not a rule that must be followed when identifying
a replacement property or properties?:

a.  The Single Property Rule
b.  The Three Property Rule
c.   The 95 Percent Rule
d.  The 200 Percent Rule
 

8. What is the most common type of 1031 exchange?:

a.   Simultaneous Exchange
b.   Forward Delayed Exchange
c.   Construction Exchange
d.   Reverse Exchange
 
  
9. In a 1031 exchange, the term "boot" usually refers to:

a.  The exchange of one property for another simultaneously
b.  The full market value of both properties combined
c.  Whatever personal items that are left behind in a property after the seller moves out
d.  Any cash proceeds not spent on the purchase of a replacement property during an exchange
 
 
10. To conduct a like-kind exchange, you must use a "Qualified Intermediary"
to facilitate the transaction. This person can be:

a.  Your real estate lawyer
b.  A real estate licensee representing either party in the exchange
c.  A certified public accountant who works with either party in the exchange
d.  An independent third party recognized by the IRS as facilitators of 1031 exchanges 

FOR THE ANSWERS, SEND AN EMAIL TO:
INFO@CARPEDIEMREALESTATE.COM WITH "1031" IN THE SUBJECT LINE
  
 

Section 1031 of the U.S. Internal Revenue Code allows U.S. taxpayers who have held property for investment or in connection with a trade or business to dispose of the property and acquire like-kind property to be held for investment or in connection with a trade or business for the purpose of deferring capital gains taxes.

TYPES OF PROPERTY THAT CAN BE EXCHANGED:
Real property or personal property, provided they are like-kind, such as:
• Real Estate • Aircraft • Broadcast licenses • Fleet vehicles • Vessels • Franchise licenses
• Copyrights • Equipment • Livestock • Artwork • Oil, gas and mineral rights
• Professional sports contracts

LIKE-KIND REQUIREMENT:
Real property - All property classified as real property under state law is like-kind to other real property.
The properties do not need to be of similar use so taxpayers can exchange raw land for a shopping center,
apartment building, etc.
Personal property - The definition of like-kind or like-class is more strict for personal property exchanges than it is
for real property exchanges. Personal property must be in the same "General Asset Class" or in the same "Product
Class" as defined by the North American Industry Classification System (NAICS).

Saul Groman, Broker and Owner of Carpe Diem Real Estate in Puerto Vallarta, Mexico, has expertise in handling 1031 REAL ESTATE EXCHANGES for U.S. Citizens with Mexico Real Estate properties, and is dedicated to providing professional, personalized qualified intermediary services in connection with forward and reverse exchanges of real and personal property.

Saul can:
• Prepare all the exchange documents
• Hold the exchange credit in an account established for each exchange
• Provide frequent reminders of the exchange deadlines
• Can facilitate disbursing the exchange funds for acquisition of the replacement property(ies)
• Personally coordinate with all parties to ensure that the transaction closes in a timely, convenient manner
• Ensure funds are deposited into an account for each exchange with a group of FDIC insured banks, ensuring  funds are immediately available for acquisition of replacement properties

For More Information on:

• How to Qualify
• The Requirements
• The Deadlines
• How To Fully Defer The Exchange
• To get the facts on the "3 Property Rule & the 200% Rule"

Contact Saul at saul@carpediemrealestate.com

                                         Carpe Diem Real Estate
                             “On Solid Ground”