文档介绍：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
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 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
Like-kind Exchanges Three-party Exchanges
Three parties may be involved in a simultaneous or non-simultaneous like-kind exchange
Finding a suitable exchange property may be difficult
Like-kind Exchanges Receipt Of Boot
Gain is recognized to extent of boot received, limited by realized gain
Loss is never recognized
Boot is any non-qualifying property
Mortgages are offset to determine if there boot
Like-kind Exchanges Basis Of Property Received
Basis of property given up less boot received plus gain recognized
Basis of non-qualifying property (boot) is the property’s FMV
Like-kind Exchanges
Exchanges between related parties
Transfer of non-like-kind property
Holding period
Involuntary Conversions Involuntary Conversion Defined
Includes theft, seizure, requisition, condemnation, or destruction of property
Gains arise when insurance or government proceeds exceed the property’s adjusted basis
Severance damages