ANSWERS: 1
  • You can buy a "fixer upper" and have the qualified intermediary (accommodator) rehab it using impounded funds. The result: you improve your replacement property using pretax dollars. Similarly, you can identify less expensive property that needs some capital improvement (like a new roof) to gobble proceeds from the property relinquished. (Taken from Section 1031 Exchanges in a Nutshell* By Peter A. Karl, III *An article published in the August 2002 issue of the Tax Reduction Letter published by Bradford & Company (1-877-829-9673)

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