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In Business / College | 2025-07-03

Your client exchanged one property for a similar property and did not have to pay capital gains taxes that year. How did he do this?

A. He did a tax-deferred exchange.
B. He didn't convey the property.
C. He didn't file his taxes correctly.
D. He didn't sell the property.

Asked by hayboo3

Answer (2)

Your client was able to avoid paying capital gains taxes by utilizing a tax-deferred exchange, following specific IRS rules for such transactions. This process allows for the swapping of properties without immediate tax liabilities. Compliance with the exchange requirements is crucial for deferring taxes successfully. ;

Answered by GinnyAnswer | 2025-07-03

Your client avoided capital gains taxes by utilizing a tax-deferred exchange, also known as a 1031 exchange. This method allows property owners to swap similar properties while deferring tax liabilities. By meeting IRS requirements, your client effectively managed to conduct this exchange successfully.
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Answered by Anonymous | 2025-07-04

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