Study sets, textbooks, questions
Upgrade to remove ads
Chapter 11 Into to Taxation
Terms in this set (25)
Adjusted basis = Initial basis − Cost recovery allowed ( or allowable )
the value of everything received by the seller in a transaction (cash, FMV of other property, and relief of liabilities) less selling costs.
property given or received in an otherwise nontaxable transaction such as a like-kind exchange that may trigger gain to a party to the transaction.
in general, an asset other than an asset used in a trade or business or an asset such as an account or note receivable acquired in a business from the sale of services or property.
Deferred like-kind exchange
a like-kind exchange where the taxpayer transfers like-kind property before receiving the like-kind property in exchange. The property to be received must be identified within 45 days and received within 180 days of the transfer of the property given up
the conversion of §1231 gain into ordinary income on a sale (or exchange) based on the amount of accumulated depreciation on the property at the time of sale or exchange.
when a taxpayer receives noncash property rather than a cash payment as a replacement for property damaged or destroyed in an involuntary conversion.
the basis of an asset received in a nontaxable exchange. An exchanged basis is generally the basis of the asset given up in a nontaxable exchange. Exchanged basis may also be referred to as a substituted basis.
the receipt of money or other property as a replacement for property that was destroyed or damaged in an involuntary conversion.
a sale for which the taxpayer receives payment in more than one period.
a direct or indirect conversion of property through natural disaster, government condemnation, or accident that allows a taxpayer to defer realized gain if certain requirements are met.
a nontaxable (or partially taxable) trade or exchange of assets that are similar or related in use.
Nonrecaptured net §1231 losses
a net §1231 loss that is deducted as an ordinary loss in one year and has not caused subsequent §1231 gain to be taxed as ordinary income.
a transaction where at least a portion of the realized gain or loss is not currently recognized.
an asset created or used in a taxpayer's trade or business (e.g., accounts receivable or inventory) that generates ordinary income (or loss) on disposition.
Production of Income
a for-profit activity that doesn't rise to the level of a trade or business
Qualified Replacement Property
property acquired to replace property damaged or destroyed in an involuntary conversion. It must be of a similar or related use to the original property even if the replacement property is real property (rental real estate for rental real estate).
Realized Gain or Loss
the difference between the amount realized and the adjusted basis of an asset sold or otherwise disposed of.
§291 depreciation recapture
the portion of a corporate taxpayer's gain on real property that is converted from §1231 gain to ordinary income.
depreciable or real property used in a taxpayer's trade or business owned for more than one year.
§1231 look-back rule
a tax rule requiring taxpayers to treat current year net §1231 gains as ordinary income when the taxpayer has deducted a §1231 loss as an ordinary loss in the five years preceding the current tax year.
tangible personal property and intangible property subject to cost recovery deductions.
real property subject to cost recovery deductions.
people or organizations that facilitate the transfer of property between taxpayers in a like-kind exchange. Typically, the intermediary receives the cash from selling the property received from the taxpayer and uses it to acquire like-kind property identified by the taxpayer.
Unrecaptured §1250 gain
a gain from the sale of real estate held by a noncorporate taxpayer for more than one year in a trade or business or as rental property attributable to tax depreciation deducted at ordinary tax rates. This gain is taxable at a maximum 25% capital gains rate.
Sets with similar terms
Chapter 14: Federal Income Taxation and Real Estate
Tax Ch. 9
Mgmt 504: Tax Exam 2 Chpt. 11
Washington Real Estate Fundamentals Ch. 14
Other sets by this creator
Chapter 16: Intro to Taxation
Chapter 18 Intro to Taxation
Chapter 15 Intro to Taxation
Recommended textbook solutions
Information Technology Project Management: Providing Measurable Organizational Value
Jack T. Marchewka
Fundamentals of Financial Management, Concise Edition
Eugene F. Brigham, Joel Houston
Politics in States and Communities
Susan A. MacManus, Thomas R. Dye
Human Resource Management
John David Jackson, Patricia Meglich, Robert Mathis, Sean Valentine
Other Quizlet sets
Public Relations Exam 1
KNES 237 Unit 26
voting behaviour: 2017 and 2019
Social Psychology Exam 2