May The Taxpayer/Exchanger Receive “Growth Factor”/Interest On The Net Proceeds (From The Relinquished Property)?
Yes, however, any “growth factor”/interest earned will be subject to taxation according to the Taxpayer’s/Exchanger’s method of accounting. What Is “Boot”? “Boot” is any excess money or unmatched property coming from the relinquished property. What Is “Adjusted Basis”? This is generally determined by taking the sales price from when the property was acquired, plus the cost of capital improvements, less depreciation. What Is “Fair Market Value” For The Purpose Of A 1031 Tax Deferred Exchange? “Fair Market Value” is the sales price of the relinquished property and the purchase price of the replacement property, without regard to any debts on either property. What Is “Like For Like” Property? Prior to the new rules, if you sold an apartment building, you had to buy an apartment building. However, according to the new rules, “like for like” simply means selling an investment property and purchasing an investment property. In other words, a single-family rental may be exchanged for a multi-
