Answer the following statements true (T) or false (F)
1. Realized gain or loss must be recognized unless a specific Code section provides for nonrecognition treatment.
2. A taxpayer exchanges an office building held as an investment asset for an office building to be used in her business. The exchange will qualify as like-kind.
3. The exchange of land held for investment purposes for stock in a real estate holding corporation held as an investment qualifies for like-kind treatment.
4. If an exchange qualifies as a like-kind exchange, nonrecognition of gain or loss is elective.
1. TRUE
Unless a provision in the tax law provides an exclusion of gain, a disallowance of loss or a deferral of either, a realized gain or loss will be recognized.
2. TRUE
Both the property transferred and the property received must be held either for productive use in a trade or business or for investment.
3. FALSE
The two assets are not of "like-kind," and marketable securities do not qualify.
4. FALSE
Like-kind treatment is mandatory if the transaction meets the terms of Section 1031.
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