Which of the following statements is false? A. Gains and losses on nontaxable ex

Question

Which of the following statements is false?

A. Gains and losses on nontaxable exchanges under IRC§1031 are deferred because the tax law recognizes that the exchange results in a mere change in form but not the substance of the taxpayer's economic position.

B. The provisions of IRC§1031 are NOT elective; the non-recognition of BOTH gains AND losses is mandatory in a like-kind exchange.

C. To qualify as a like-kind exchange, the properties exchanged must be either business or investment property.

D. The basis of boot property received in a like-kind exchange is its fair market value on the date of the exchange and NOT carryover basis of the property given up in the exchange.

E. ALL of the above statements are true.

Explanation / Answer

Answer

B. the provision of IRC 1031 are not elective the non recogintion of both gains and

losses is mandatory in a like knd exchange

non recognition of gains is mandatory in a like kind exchange however

non recogination of losses are not mandatory in a like kind exchange according to the

section 1031 of internal revenue code

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