Tax Analysts provides news, analysis, and commentary on tax-related topics, including the latest developments affecting treatment of sales and exchanges.
Recognition of gains and losses on property generally takes place when the property is sold or exchanged (section 1001). A taxpayer’s tax liability with respect to a disposition of property can only be determined once the existence of a gain or loss, and whether it is a capital or ordinary gain or loss, has been determined.
To determine the amount of the gain or loss, basis in the property must be determined. How to determine basis in specific circumstances is a topic that sees considerable amounts of guidance, legislation, and regulation, and thus commentary as well. ("IRS Publishes Proposed Regs on Circular Stock Basis Adjustments"; "ABA Meeting: Johnson Approach Likely Preserved in Big Basis Project Rewrite")
One specific type of exchange that is of particular interest to tax practitioners is the like-kind exchange under section 1031. Such an exchange of “property held for productive use in a trade or business or for investment” results in no gain or loss to the parties exchanging the property, but only if the property is deemed to be of like kind. What, exactly, is like-kind property, and how to follow the requirements of section 1031 and associated regulations are issues that keep tax professionals in business.
Tax Analysts consistently and promptly publishes all relevant developments regarding taxation of sales and exchanges.
Tax Notes Federal and Tax Notes Today Federal subscribers have free access to James M. Peaslee and David Z. Nirenberg, Federal Income Taxation of Securitization Transactions and Related Topics (Fifth Edition). Chapter 3, Part D, discusses authorities in 15 areas that distinguish a tax law sale from a financing. Chapter 6, Part D.2, discusses when modifications to debt are treated as debt exchanges. Chapter 9, Part E.5.c, looks at whether the transfer of a negative value residual interest is a sale or exchange. Chapter 15 discusses when the transfer of assets to a securitization vehicle by the sponsor of asset-backed securities is a sale.
