Question

If a client is interested in a 1031 exchange, which of the following activities can a real estate broker assist the client with?

Select one:
a. Determining the taxes that will be due
b. Locating properties
c. Help the client write the exchange contract
d. All of these activities

Answer 1

A real estate broker can assist with locating properties and helping to write the exchange contract in a 1031 exchange, but they cannot determine the taxes that will be due, which requires a tax professional or accountant.

Step-by-step explanation:

If a client is interested in a 1031 exchange, a real estate broker can assist the client with several activities, but with some limitations. Specifically, they can help with locating properties that may qualify for the exchange. They can also assist with helping the client write the exchange contract, although they should not draft legal documents without the involvement of an attorney to ensure that the exchange meets all legal requirements.

However, it is important to note that a real estate broker is not typically qualified to determine the taxes that will be due, as this is a job for a tax professional or accountant who specializes in tax law and 1031 exchanges. The broker's main role is to use their real estate expertise to assist in the logistical and transactional aspects of finding appropriate properties and possibly negotiating terms.