When a 1031 exchange is completed, the investor's tax basis in the new property is:
Correct Answer
C) The basis of the old property plus any additional money invested
In a 1031 exchange, the investor's basis in the new property is the 'carryover' basis from the old property, plus any additional cash invested (boot paid), minus any boot received. This is why the capital gains tax is deferred, not eliminated.
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