Running head: COMMERCIAL REAL ESTATE PROCEDURES
Commercial Real Estate Procedures
COMMERCIAL REAL ESTATE PROCEDURES
1. What is a 1031 Exchange?
The 1031 is an exchange system that allows real estate investors to defer capital gain
taxes by exchanging one investment property with another. The system aims at reducing the
taxes incurred when one is selling property .the process of 1031 exchange begins with an
investor identifying another investor who is also willing to sell a property. The exchange requires
the property being exchanged to be of like-kind such that one they are closely linked, e.g., land
in one urban center and land in another center (Borden, 2018). The timeline of exchange should
almost be similar In that both investors should be willing to exchange property at the current
time and there should be no delay in any of the parties.
The property being exchanged should also be equal and be of the same equity. The
process of 1031 exchange also requires a standard receipt showing the exchange process which
can be used in case of future differences. A neutral and qualified intermediary should also be
present for 1031 exchange to take place (Borden, 2018). The exchange authorized the transaction
of IRS code which sta...
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