The Quiz
1. What is an IRC Section 1031 Exchange?
A. Process that you can exchange your primary residence for a vacation home
B. Way to exchange your Picasso Painting for a Villa in France
C. Way to exchange property for productive use in a trade or business or for investment for other "like kind" property held for productive use in a trade or business or for investment
D. A & C
2. Like Kind Property is:
A. Bare ground and a single family house held for investment
B. A 20,000 square foot office building for a 100 unit apartment building
C. Duplex for 3 single family rental houses
D. All of the above
3. Does notice have to be given to all parties in a transaction that a "1031 exchange" is taking place.
4. Do all proceeds (gain) in an exchange have to be re-invested for the transaction to be a valid exchange?
5. Escrow can act as an accommodator or facilitator of an exchange.
6. Can a seller sell his property on contract and then buy replacement property to complete his exchange?
7. What is the most common trap to avoid in an exchange?
A. The "leg hold" kind
B. Buying a duplex
C. Selling a duplex
D. Using a wrap around contract or trust deed
8. What is boot as regards to an exchange?
A. What you slip on your feet on a rainy day.
B. The failure of an exchange "the exchange is booted".
C. "Cash" received by the taxpayer.
D. A lawsuit or dispute arising in the E.M.
9. You have how many days to "identify" your replacement property after your sale is concluded.
A. 45 days, unless the 45th falls on a holiday
B. Unlimited, IRS is not concerned about this
C. 45 days period
D. 45 days unless it falls on a day your taxes are due which is usually April 15th
10. What are the identification rules for an exchange.
A. You can identify any number of properties any way you like. IRS doesn’t care just as long as you identify.
B. 3 property rule
C. 200% rule
D. 95% rule
E. B, C, and D
11. A "1031" exchange must be completed by 180 days following the transfer of the relinquished property.
12. If you have any questions about exchanges what phone number do you call?
13. What Accommodation Company would give you and your client the best service at the best price in the Quad County?
