Asked by Rebecca Dooley on May 10, 2024
Verified
Gain realized on a like-kind exchange is excluded from income in all of the following circumstances except:
A) When boot is given.
B) When boot is received.
C) When a liability is assumed.
D) Both when boot is received and when a liability is assumed.
Like-kind Exchange
A tax deferment on the exchange of real property used for business or investment for another property of like kind.
Boot Received
Cash or other property added to a transaction to even out the exchange, which can have tax implications for the recipient.
- Absorb the principles and prerequisites for similar asset exchanges in accordance with the Internal Revenue Code.
- Examine the effects of obtaining a boot in similar-exchange processes and its influence on gain acknowledgement.
Verified Answer
SS
Sugeetha SattiyanMay 12, 2024
Final Answer :
B
Explanation :
When boot is received in a like-kind exchange, the gain realized is not excluded from income; instead, it becomes taxable to the extent of the boot received.
Learning Objectives
- Absorb the principles and prerequisites for similar asset exchanges in accordance with the Internal Revenue Code.
- Examine the effects of obtaining a boot in similar-exchange processes and its influence on gain acknowledgement.