Defer Taxes by Exchanging rather than Selling?
How can you dispose of appreciated property without being taxed on the gain by exchanging it rather than selling it? You can defer tax on your gain through the “like-kind” exchange rules.
A like-kind exchange is any exchange (1) of property held for investment or for productive use in your trade or business for (2) like-kind investment property or trade or business property. For these purposes, “like-kind” is very broadly defined.
The Rules are Complex – Loggins Can Help
Unless it is a straight asset-for-asset exchange, you may have to recognize any gain from the exchange. The rules for handling and reporting like-kind exchanges and gains, in addition to any debt relieved by the exchange can be quite complex and technical. The professionals at Loggins & Associates are experts in fulfilling the IRS requirements and getting you the best tax savings. We can help you decide if a like-kind exchange would be beneficial to you based on your individual tax situation.
Like-kind exchanges are an excellent tax-deferred way to dispose of investment, trade, or business assets. If you have additional questions or would like to discuss this topic, please contact our office.
Ben R. Loggins
Certified Public Account