ExpertHard1 markMultiple Choice
CPA · Question 18 · Area III: Property Transactions
In a like-kind exchange under IRC §1031 (post-TCJA), which of the following exchanges qualifies for nonrecognition of gain?
In a like-kind exchange under IRC §1031 (post-TCJA), which of the following exchanges qualifies for nonrecognition of gain?
Answer options:
A.
An office building for a warehouse.
B.
Business equipment for similar business equipment.
C.
Inventory for inventory.
D.
Partnership interest for partnership interest.
How to approach this question
Post-TCJA (2018+), §1031 applies ONLY to Real Property. No cars, no equipment, no crypto.
Full Answer
A.An office building for a warehouse.✓ Correct
Under the Tax Cuts and Jobs Act (TCJA), IRC §1031 like-kind exchange treatment is limited to real property used in a trade or business or held for investment. Exchanges of personal property (machinery, vehicles, etc.) no longer qualify.
Common mistakes
Thinking equipment still qualifies.
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