A Colorado investment property sells for $820,000. The buyer uses a 1031 exchange (tax-deferred exchange). To defer all capital gains, the replacement property must cost at least:
Why B. At least $820,000 or more, using all equity from the sale Is Correct
Answer B: B. At least $820,000 or more, using all equity from the sale
Exam Tip: Real Estate Math
Math questions are formula-based. Memorize the key formulas: commission splits, proration, cap rate (NOI ÷ Value), GRM (Price ÷ Gross Rent), and LTV (Loan ÷ Value). Practice converting between annual and monthly figures.
Key Real Estate Math Terms in This Question
People Also Study
Related Colorado Questions
- A Colorado property owner using a 'like-kind exchange' (1031 exchange) can defer capital gains taxes by:Finance
- A Colorado investment property sold for $850,000. The original purchase price was $600,000. The owner's capital gains tax rate is 20%. Assuming a $150,000 gain after deducting improvements and depreciation recapture, what is the capital gains tax owed?Real Estate Math
- An appraiser uses the cost approach to value a Colorado commercial property. The replacement cost new is $800,000 and the property has 25% depreciation. The land is worth $150,000. What is the indicated value?Property Valuation
- A Colorado homeowner wants to price their home so they net at least $400,000 after paying a 5.5% commission. What is the minimum sale price?Real Estate Math
- A Colorado seller's net sheet shows: sale price $485,000, commission 5.5%, mortgage payoff $195,000, prorated taxes $1,200, other closing costs $2,800. What are the net proceeds?Real Estate Math
- A Colorado 10-unit apartment building sells for $1,500,000. Annual gross rents are $168,000 with a 5% vacancy rate and operating expenses of $60,000. What is the cap rate at the sale price?Real Estate Math
- A Colorado appraiser calculates the value using the cost approach as follows: land value $80,000; replacement cost new $350,000; accrued depreciation 20%. What is the indicated value?Property Valuation
- Colorado's Homestead Exemption protects a portion of a homeowner's equity from:Property Ownership
Key Terms to Know
A tax-deferred exchange allowing investors to sell one investment property and reinvest proceeds in a like-kind property while deferring capital gains taxes.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Math Concepts
Study This Topic
Practice More Colorado Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free Colorado Quiz →