Real Estate Math
In a Virginia 1031 exchange, the investor sells a property for $800,000 with a basis of $400,000. To fully defer capital gains, the replacement property must be worth at least:
A$400,000
B$800,000✓ Correct
C$1,200,000
D$600,000
Explanation
To fully defer all capital gains in a 1031 exchange, the replacement property value must equal or exceed the net sale price of the relinquished property ($800,000), and all proceeds must be reinvested.
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