FinanceIntermediateDelaware Exam

What are the key time requirements in a Delaware 1031 exchange?

AIdentify replacement within 30 days; close within 90 days

BIdentify replacement property within 45 days of sale; close on replacement within 180 days of saleCorrect

CIdentify and close on replacement within 60 days of sale

DIdentify within 60 days; close within 270 days

Why Identify replacement property within 45 days of sale; close on replacement within 180 days of sale Is Correct

Answer B: Identify replacement property within 45 days of sale; close on replacement within 180 days of sale

In a standard 1031 exchange, the investor must identify potential replacement properties within 45 days of closing the relinquished property and complete the acquisition of the replacement property within 180 days of closing.

Exam Tip: Finance

Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.

Key Finance 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.

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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.

Contingency

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

Option Contract

A contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.

Amortization

The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.