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.
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Famous quotes containing the words exchange, loss, property and/or relative:
“I live in my house as I live inside my skin: I know more beautiful, more ample, more sturdy and more picturesque skins: but it would seem to me unnatural to exchange them for mine.”
—Primo Levi (1919–1987)
“I have always observed, when there is as much sour as sweet in a compliment, that an Englishman is eternally at a loss within himself, whether to take it, or let it alone: a Frenchman never is.”
—Laurence Sterne (1713–1768)
“Let the amelioration in our laws of property proceed from the concession of the rich, not from the grasping of the poor. Let us understand that the equitable rule is, that no one should take more than his share, let him be ever so rich.”
—Ralph Waldo Emerson (1803–1882)
“Are not all finite beings better pleased with motions relative than absolute?”
—Henry David Thoreau (1817–1862)