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08-11-2017 11:28 PM
In my 1031 exchange for rental real estate There are two items on the positive side of the closing statement. One is a tax refund- that pays me for my share of taxes already paid so that isn't boot. But the other item is a rebate of Real Estate agent's commission which does reduce what I have to pay out to close on the property. In other words, because of the rebate it takes that much less funds from the Exchange escrow account to close on the replacement property. Though it is actually a discount on commission (which is sometimes split between buyer and seller) is it considered "boot", a cash payment, and so a "gain"?
08-30-2017 01:39 PM
A rebate of a realtor's commission is considered to be a reduction of purchase price (and therefore, basis), and is not considered boot in the exchange.