Like-Kind Exchange of Loss Property With A Relative
Section 267(a) of the tax code disallows deductions for losses resulting from sales to related persons. However, the basis of the property received by the taxpayer in a like-kind exchange with a relative is governed by section 1031. In other words, the taint of disallowance under section 267 does not carry over to the new asset. The loss is preserved in the basis of the new property when the new property is sold.
Read more about this topic: Like-kind Exchange
Famous quotes containing the words exchange, loss, property and/or relative:
“To coöperate in the highest as well as the lowest sense, means to get our living together. I heard it proposed lately that two young men should travel together over the world, the one without money, earning his means as he went, before the mast and behind the plow, the other carrying a bill of exchange in his pocket. It was easy to see that they could not long be companions or coöperate, since one would not operate at all. They would part at the first interesting crisis in their adventures.”
—Henry David Thoreau (1817–1862)
“I have never worked for fame or praise, and shall not feel their loss as I otherwise would. I have never for a moment lost sight of the humble life I was born to, its small environments, and the consequently little right I had to expect much of myself, and shall have the less to censure, or upbraid myself with for the failures I must see myself make.”
—Clara Barton (1821–1912)
“The power of perpetuating our property in our families is one of the most valuable and interesting circumstances belonging to it, and that which tends the most to the perpetuation of society itself.”
—Edmund Burke (1729–1797)
“In a country where misery and want were the foundation of the social structure, famine was periodic, death from starvation common, disease pervasive, thievery normal, and graft and corruption taken for granted, the elimination of these conditions in Communist China is so striking that negative aspects of the new rule fade in relative importance.”
—Barbara Tuchman (1912–1989)