Escrow & TitleIntermediateAlabama Exam

Concurrent closing in a 1031 exchange means:

ABoth the sale and purchase close simultaneouslyCorrect

BThe exchange occurs over two years

CThe exchanger uses a qualified intermediary

DTwo properties in different states are exchanged

Why Both the sale and purchase close simultaneously Is Correct

Answer A: Both the sale and purchase close simultaneously

A concurrent (simultaneous) exchange is the simplest form of 1031 exchange where both the sale of the relinquished property and purchase of the replacement property close at the same time.

Exam Tip: Escrow & Title

Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.

Key Escrow & Title Terms in This Question

1031 Exchange

A tax-deferred exchange allowing investors to sell one investment property and reinvest proceeds in a like-kind property while deferring capital gains taxes.

People Also Study

Key Terms to Know

1031 Exchange

A tax-deferred exchange allowing investors to sell one investment property and reinvest proceeds in a like-kind property while deferring capital gains taxes.

Title Insurance

Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.

Closing Costs

Fees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.

Contingency

A condition in a purchase contract that must be satisfied before the sale can proceed to closing.