Flashcards in Mod 36: Property Transactions Key Areas Deck (12):
What is the recognized gain on involuntary conversions?
1 realized gain
2 amount not reinvested
How do you calculate the new basis in involuntary conversions?
Cost of new property
- gain not recognized
When a loss is incurred on an involuntary conversion, it is...
New basis for new home purchased when you used principal residence deduction of $250,000
Cost of new home
- gain not recognized ($250,000)
How do you calculate new basis in a like kind exchange? 4
Old basis of property given up
+ gain recognized
+ boot paid
- boot received
Section 1231, applies if 2 characteristics exist
1 personal or real property used in trade or business
2 held for more than 1 year
Real property 2 examples
Land, real estate
Section 1245, 2
1 Depreciation of sec. 1231 property
2 treated as ordinary income
Corporations who sell real estate, what are the recapture rules? 2
1 Sec. 291
2 20% of depreciation is recaptured as ordinary income
If 1231 gains and losses are netted and produce a 1231 gain, what is the treatment of the income?
Treated as capital gain