In a like-kind exchange under IRC §1031 (post-TCJA), which of the following exchanges qualifies for nonrecognition of gain?

Answer options:

An office building for a warehouse.

Business equipment for similar business equipment.

Inventory for inventory.

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.

Question 17 All questions Question 19

Practice the full CPA REG Practice Exam 4

72 questions · hints · full answers · grading

More questions from this exam

Q01A CPA is representing a client in an IRS examination. The client has requested that the CPA not p...Hard Q02A tax return preparer is engaged to prepare a tax return for a client who has a significant deduc...Hard Q03Regarding the burden of proof in a civil tax proceeding, which of the following statements is cor...Hard Q04A taxpayer filed their Year 1 individual income tax return on April 1, Year 2. The return reporte...Hard Q05Under the Ultramares doctrine regarding a CPA's liability for negligence to third parties, which ...Hard

View all 72 questions →