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Frequently Asked Questions
What is the difference between a sale and an exchange?
A sale is an exchange of real property for cash. Because cash does not
meet the requirements for "like-kind" property, the capital gains tax
is not deferred. An exchange where property is traded for property is
a "non-taxable" sale.
What provisions are required in a Purchase and Sale Agreement to enter into an Exchange?
Exchanges begin with a Purchase and Sales Agreement. When a Purchase and Sale Agreement is used to begin a transaction, it should contain language which establishes the exchangor's intent and notifies the buyer of the exchange.
Can an investor trade from several small properties into one large one?
Examples of such contractual provisions are:
"It is the intent of the Seller to perform an IRC Section 1031 tax deferred exchange by trading the property herein with Starker Services, Inc. Buyer agrees to execute an Assignment at the request of Seller at no additional cost or liability to Buyer."
"It is the intent of the Buyer to perform an IRC Section 1031 tax deferred exchange by trading the herein with Starker Services, Inc. Seller agrees to execute an Assignment Agreement at the request of buyer at no additional cost or liability to Seller."
Yes. An investor can also trade out of one large property into several smaller ones. When selecting more than one property, investors must adhere to the Treasury guidelines regarding property identification.
How are the exchange funds protected?
Starker Services, Inc. has a variety of security devices including semi-fettered accounts, letters of credit, Treasury-backed Securities and individual accounts.