Sorry, Mike, I maybe needed to provide a better explanation, but I mean the commission.

For example, someone bought property for $300K and now it’s worth $500K.

I see people get stoked about using the 1031 to sort of “lock” in their $200K of profits in this situation… they avoid the, say, 20% tax on the $200K of gain. So that’s $40K of “savings.”

But they then pay a 6% real estate commission to the brokers on that $500K sales price… or $30K of commissions… and at that point, the economics may not really work.

You lost me a little on the transaction fees. Are you saying there is typically a 6% fee for a 1031 transaction in addition to the seller’s commissions paid in a standard sale?

You make a solid point that the least expensive way to defer the tax is to not sell the property.