Fairhaven Realty
Fairhaven Realty
Fairhaven Realty, a br of Lakeway Realty, Inc.

Q & A 1031 Tax Exchanges

Posted on March 1, 2010

Monday, March 01, 2010 finds the weather a bit cool in Bellingham, WA. Our area has certainly experienced a very mild winter. Trees are blossoming, daffodils are blooming, grass is growing and spring is just around the corner!

QUESTIONS AND ANSWERS ON 1031 TAX EXCHANGES (continued from previous blogs).
What is the difference between “realized” gain and “recognized” gain?
Realized gain the increase in the taxpayer’s economic position as a result of the exchange. In a sale, tax is paid on the realized gain. Recognized gain is the taxable gain. Recognized gain is the lesser of realized gain or the net boot received.
 
What is boot?
Boot is any property received by the taxpayer in the exchange which is not like-kind to the relinquished property. Boot is characterized as either “cash” boot or “mortgage” boot. Realized gain is recognized to the extent of net boot received. 

*Information gathered/quoted from the National Association of REALTORS® online library-1031 Exchange-FEA (Federation of Exchange Accommodations)

 
 

Share: del.icio.us Digg StumbleUpon
Post a Comment on "Q & A 1031 Tax Exchanges"
Name
Email
Website
Comment
 
Fairhaven Realty, a Branch of Lakeway Realty Inc. | 1100 11th Street, Bellingham, WA 98225 | Office: 360-676-8990 | Fax: 360-734-5109
©2010 GraphicalData, Inc.   Site Map