An alternative to acquiring real property for cash is a(n)__________,whereby the seller exchanges its property for another piece of property.
A) tax-deferred exchange
B) sale and leaseback
C) option contract
D) wraparound financing

Question

Quizplus · Accepted Answer

A tax-deferred exchange allows the seller to exchange their property for another piece of property without incurring tax on the sale. This can be a more financially advantageous option than acquiring real property for cash, as it allows the seller to defer their tax liability and potentially acquire a more desirable property. Sale and leaseback (B) involves selling the property and then leasing it back from the buyer, which may not be the preferred option for many sellers. Option contract (C) involves the buyer securing the right to purchase the property at a later date, which is not the same as a direct exchange. Wraparound financing (D) involves the seller financing the sale of the property, which does not involve an exchange of properties.

An Alternative to Acquiring Real Property for Cash Is A(n)__________,whereby