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Rex sell (relinquished) property and completes a like-kind exchange by purchasing replacement property. The relinquished...

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Accounting

Rex sell (relinquished) property and completes a like-kind exchange by purchasing replacement property. The relinquished property is referred to as the Old property and the replacement as the New property. You may assume that all elements of Section 1031 have been satisfied. Complete the last two rows of each column

FMV Old 600,000 600,000 600,000 600,000
Liability Old -0- -0- -0- <100,000>
Basis Old 100,000 100,000 100,000 100,000
FMV New 600,000 700,000 500,000 700,000
Liability New -0- -0- -0- <300,000>
Cash -0- <100,000> -0- -0-
Cash Received -0- -0- 100,000 100,000
Gain Realized
Gain Recognized
Basis New

The above example is what is typically found in a secondary source explaining 1031 exchanges. Exchanges are almost never two-party exchanges. When someone sells relinquished property and wants to do an exchange, the buyer will not cooperate like Crown Zellerbach did in the Starker exchange.

a. How does a qualified intermediary solve this problem?

b. What are the two time periods required to complete an exchange?

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