Which of the following are true about exchanges of property under section 1031 I

Question

Which of the following are true about exchanges of property under section 1031 IRC?

A. Gain is not recognized at the time the exchange is made unless there is "boot."

B. The basis of the acquired property is equal to the basis in the exchanged property plus any boot that was paid.

C. It is not possible to sell the property, identify a property to exchange for, complete the transaction and still be within the bounds of the exchange rules.

D. A & C, but not B

E. A, B, & C

F. None (A,B, or C) is true.

Explanation / Answer

Exchanges of property under section 1031 IRC, Gain is not recognized at the time the exchange is made unless there is "boot." Here Boot is the cash pais by any party to equalise the transaction value. The basis of the acquired property is equal to the basis in the exchanged property plus any boot that was paid. It is not possible to sell the property, identify a property to exchange for, complete the transaction and still be within the bounds of the exchange rules.

So, option (A), (B) and (C) is correct answer.

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.