HA_4422__Chapter_12_Handout_Notes - May elect to defer...

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HA 4422 Chapter 12 Non-recognition transactions Like-kind Exchanges Only for trade/business or investment property Must be like-kind property in the taxpayer’s hands Page 536 general asset classes Boot – anything that is not like-kind Cash Relief of Debt If both sides assume debt –net the debt Only the party with the larger debt (before exchange) is considered to receive boot Non-like-kind property Gain is recognized to the extent of boot received Losses on like-kind exchanges are not recognized Related party transactions Must hold for 2 years to qualify as like-kind Carryover tax attributes Holding period Recapture attributes Involuntary Conversions Losses are recognized on business/investment property
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Unformatted text preview: May elect to defer gains if purchase Qualified Replacement Property Proceeds not re-invested are recognized to extent of gain Have 2 years after year of loss to replace Condemnations: Losses on personal use assets are not deductible Replacement property only has to be like-kind Have 3 years after loss to replace Sale of Principal Residence Principal Residence Owned and occupied as Principal Residence for aggregate of 2 out of previous 5 years (5 out of 5 if from a LKE) Exclude gain up to $250,000 for a single person, $500,000 for MFJ Special rules may allow a smaller exclusion is have to sell for certain reasons Can use the exclusion every two years...
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HA_4422__Chapter_12_Handout_Notes - May elect to defer...

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