Escrow & Title
In a Wisconsin 1031 exchange (like-kind exchange), the use of a 'qualified intermediary' (QI) is required to:
AProvide legal advice on the exchange
BHold the exchange proceeds and facilitate the purchase of replacement property to maintain the tax-deferred status of the exchange✓ Correct
CAppraise the relinquished property
DFile the exchange documents with DSPS
Explanation
A qualified intermediary (accommodator) receives the proceeds from the sale of the relinquished property, holds them, and facilitates the purchase of the replacement property to prevent constructive receipt by the taxpayer.
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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.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
Math Concepts
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