[gans555]

Hello everyone,

just curious if anyone has an easy way to remember like kind exchanges and involuntary conversions. I am using Yeager and understood what Dr. Yeager was saying but don’t think I could remember it for a test. Any ideas would be great. Thanks

[Anonymous]

I just did the cliffnote version of my notes:

Only recognize gain to the extent that basis < FMV of boot given (think about it, if you had an asset worth $2,000 but gave it away for value of $5,000, you just gained $3,000 off the books).

If liability assumptions are included, treat them as boot. If both assumed and relieved, recognize the difference between the two as income.

If the asset is resold within 2 years of the exchange, any of the gain is taxable and must be recognized.

Someone correct me if I am wrong but I think that's how it works.

[Author]

Replies