Chapter 12 Property Transactions Nontaxable Exchanges
Chapter 12 Property Transactions: Nontaxable Exchanges
Learning objectives Understand the tax consequences arising from a like-kind exchange Determine the basis of property received in a like-kind exchange
Learning Objectives • Understand the tax consequences arising from a like-kind exchange • Determine the basis of property received in a like-kind exchange
Learning Objectives Determine whether gain from an involuntary conversion can be deferred Determine the basis of replacement property in an involuntary conversion Determine when a gain resulting from sale of principal residence may be excluded
Learning Objectives • Determine whether gain from an involuntary conversion can be deferred • Determine the basis of replacement property in an involuntary conversion • Determine when a gain resulting from sale of principal residence may be excluded
Like-kind Exchanges Like-kind Property Defined Refers to nature and quality Same class Personal property for personal property Real property for real property Certain properties do not qualify for like- kind exchange
Like-kind Exchanges Like-kind Property Defined • Refers to nature and quality • Same class – Personal property for personal property – Real property for real property • Certain properties do not qualify for likekind exchange
Like-kind Exchanges A Direct Exchange Must Occur Direct exchange not AUTO SHOWROOM a conversion into proceeds with a subsequent purchase Certain interdependent transactions may 目中 eceIve exchange treatment Three-party exchange
Like-kind Exchanges A Direct Exchange Must Occur • Direct exchange not a conversion into proceeds with a subsequent purchase • Certain interdependent transactions may receive exchange treatment • Three-party exchange