Finance
What is a '1031 exchange' and how is it used in Rhode Island real estate investment?
AA tax credit for first-time homebuyers
BA tax-deferred exchange allowing investors to sell investment property and reinvest the proceeds into another like-kind investment property, deferring capital gains tax✓ Correct
CA federally subsidized mortgage program
DA Rhode Island state tax program for property transfers
Explanation
A 1031 exchange (tax-deferred exchange) allows a real estate investor to defer capital gains tax when selling investment property by reinvesting the proceeds into like-kind property within specified timeframes. It is widely used in Rhode Island investment real estate.
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