Warning: Like-Kind Exchange of Loss Property
While taxpayers generally prefer non-recognition for realized gains (so they do not have to recognize the gain currently and pay the resulting federal income tax currently), they usually prefer to recognize realized losses currently in order to obtain the tax benefit of the resulting deduction sooner. That means a like-kind exchange is unfavorable in the case of a realized loss. None of the loss will be recognized regardless of boot received.
Read more about this topic: Internal Revenue Code Section 1031
Famous quotes containing the words exchange, loss and/or property:
“We never exchange more than three words with a Friend in our lives on that level to which our thoughts and feelings almost habitually rise.”
—Henry David Thoreau (1817–1862)
“When a man laughs at his troubles he loses a good many friends. They never forgive the loss of their prerogative.”
—H.L. (Henry Lewis)
“Man was born rich, or inevitably grows rich by the use of his faculties; by the union of thought with nature. Property is an intellectual proposition.”
—Ralph Waldo Emerson (1803–1882)