T11F-Chp-11-7-Principles -Gains and Losses on Sale or Exchange-Basis

T11F-Chp-11-7-Principles -Gains and Losses on Sale or Exchange-Basis

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4c98ca04a1c924d6268eed2dce63a1631c040992.doc.  Page 1 of 2 Principles Regarding Gains and Losses on Exchange 1. The tax law requires you to report all income except where the law provides an exception. 2. Gains and losses on sale or exchanges of assets are included in income. The gains or losses may be ordinary or capital gains and losses. 3. As a general rule, gains are recognized on disposal of all assets whether they were held for personal reasons, or profit motive, i.e. business or investment . 4. As a general rule, losses are only recognized on disposal of assets held with a profit motive. There is an exception for casualty losses of personal use property. 5. Gain or loss is measured by the following formula Total value of all consideration received Less: Basis of all assets given up Equals: Gain realized 6. In a nontaxable like-kind exchange, you recognize gain up to the amount of boot received. You do not recognize loss in a like-kind exchange.
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This note was uploaded on 03/09/2012 for the course ACCT 4220 taught by Professor Burton during the Spring '08 term at UNC Charlotte.

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T11F-Chp-11-7-Principles -Gains and Losses on Sale or Exchange-Basis

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