Asked by Robin Smith on May 10, 2024
Verified
The exchange of a 5-year class asset for a 7-year class asset would not qualify for "like-kind" treatment.
Class Asset
Categories of assets grouped together based on having similar financial characteristics, often used in finance for valuation and risk assessment.
Like-kind Treatment
A tax deferral for exchanges of business or investment properties of similar nature, per Internal Revenue Code Section 1031.
- Understand the rules and qualifications for like-kind exchanges under IRC.
Verified Answer
SL
Shameka LovelessMay 15, 2024
Final Answer :
True
Explanation :
The assets being exchanged must be of the same class (i.e. both 5-year class assets) in order to qualify for like-kind treatment. A 5-year class asset cannot be exchanged for a 7-year class asset and still qualify for this treatment.
Learning Objectives
- Understand the rules and qualifications for like-kind exchanges under IRC.