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Business Accounting CONCEPTS IN FED.TAX.,2020-W/ACCESS

Like-kind exchange refers to the deferred tax exchange which occurs when any assessee or taxpayer sold an asset and purchases another asset of a similar kind. Like-kind exchange does not create tax liability on the sale of the asset. To determine: The qualifications of a like-kind exchange. The following are certain criteria that qualify like-kind exchange as per section 1031 of the Internal revenue code: The asset that is being exchanged, i.e., sold and purchased should be of a similar kind (same category). The asset that is being exchanged should be used either for business purposes or held as an investment. Time restrictions should be kept in mind while doing this exchange, i.e., sold and purchase should be on specific time or requirement. The replacement asset must be of equal or greater value.

Like-kind exchange refers to the deferred tax exchange which occurs when any assessee or taxpayer sold an asset and purchases another asset of a similar kind. Like-kind exchange does not create tax liability on the sale of the asset. To determine: The qualifications of a like-kind exchange. The following are certain criteria that qualify like-kind exchange as per section 1031 of the Internal revenue code: The asset that is being exchanged, i.e., sold and purchased should be of a similar kind (same category). The asset that is being exchanged should be used either for business purposes or held as an investment. Time restrictions should be kept in mind while doing this exchange, i.e., sold and purchase should be on specific time or requirement. The replacement asset must be of equal or greater value.

Solution Summary: The author explains how like-kind exchange is a deferred tax exchange that occurs when an assessee or taxpayer sells an asset and purchases another asset of similar kind.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN: 9780357110362

Author: Murphy

Publisher: CENGAGE L

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