Virginia Real Estate Exam Practice Question
Which of the following is a potential drawback to a real property exchange?
Correct Answer: D
Rationale: In a real property exchange, taxable gains can arise if the exchange does not meet specific criteria set by tax regulations. This means that while investors may defer taxes on gains, they could still face tax liabilities in the future, making it a potential drawback.
Option A, deferment, is typically an advantage, allowing investors to postpone tax payments. Option B, depreciation, can also be beneficial, as it may reduce taxable income. Option C, equity, generally represents an asset's value and is not a drawback but rather a positive aspect of property ownership.
Unlock All Questions
Subscribe to Premium for full access to all practice questions, detailed rationales, and performance tracking.
Subscribe Now