Finance
A Massachusetts investor uses a '1031 exchange' to defer capital gains tax when selling an investment property. To qualify, the replacement property must be:
AIn Massachusetts only
BOf 'like-kind' (investment or business use real property) and acquired within specified timelines✓ Correct
CThe same type of property (apartment for apartment only)
DWorth exactly the same as the relinquished property
Explanation
A Section 1031 like-kind exchange allows deferral of capital gains when one investment property is exchanged for another like-kind investment property. The identification and acquisition must be completed within specific IRS timelines (45 days to identify, 180 days to close).
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