💰 CPA Exam Prep

What is a "1031 exchange"?

A A stock trade
B A like-kind exchange that defers capital gains tax on certain property exchanges
C A tax credit
D A retirement account

✓ Correct Answer: Option B

Section 1031 allows deferral of capital gains for real property exchanged for like-kind real property.

💡 Why is B) the correct answer?

The correct answer to the question "What is a "1031 exchange"?" is Option B: A like-kind exchange that defers capital gains tax on certain property exchanges.

The other options — A) A stock trade, C) A tax credit, D) A retirement account — are incorrect for this CPA Exam Prep question. As explained above: Section 1031 allows deferral of capital gains for real property exchanged for like-kind real property.

📚 About This CPA Exam Prep Practice Question

This 2-level CPA Exam Prep question from the Regulation (REG) topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CPA Exam Prep practice test or use flashcards for spaced repetition review.

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