Basis Flashcards
Summary of 1031 (voluntary) Valuation Rules
Realized gain:
FMV property rec’d
— adjBasis prop given up
Recognized gain (if boot rec’d or appreciated boot given up):
min(boot rec’d, Realized gain)
Deferred gain
Realized – Recognized gain
Basis in prop. rec’d
FMV rec’d
– Deferred gain
Summary of 1033 (involuntary) Valuation Rules
Realized gain:
Amount realized
— adjBasis prop given up
Recognized gain:
Amount realized but not reinvested in new property, limited to realized gain
Deferred gain
Realized – Recognized gain
Basis in prop. rec’d
FMV rec’d
– Deferred gain
Taxation of Investment Transactions - SBBI
Income: Taxable (except Muni)
Sale at Gain: Cap Gain
Sale at Loss: Cap Loss
Adj Basis: Generally cost
Taxation of Mutual Funds
Income: Taxable
Sale at Gain: Cap Gain
Sale at Loss: Cap Loss
Adj Basis: Generally cost + reinv. income
Taxation of Like-kind Exchanges
Income: N/A
Sale at Gain: Cap Gain to extent of Boot
Sale at Loss: Postponed
Adj Basis: Generally carryover
Taxation of Installment Sales
Income: Taxable interest
Sale at Gain: Cap Gain
Sale at Loss: N/A
Adj Basis: Cost
Taxation of Inherited Property Transactions
Income: Taxable
Sale at Gain: Cap Gain
Sale at Loss: Cap Loss
Adj Basis: Generally cost
Taxation of transactions of gifts received
Income: Taxable
Sale at Gain: Cap Gain
Sale at Loss: Cap Loss
Adj Basis: Double basis rule
Taxation of personal residence transactions
Income: N/A
Sale at Gain: 250/500 exempt. Cap Gain
Sale at Loss: Disallowed
Adj Basis: Cost
Taxation of personal use property transactions
Income: N/A
Sale at Gain: Cap Gain
Sale at Loss: Disallowed
Adj Basis: Cost
Taxation of 1244 stock transactions
Must have obtained shares directly from company
Income: Taxable
Sale at Gain: Cap Gain
Sale at Loss: Ordinary loss (up to $50,000 annually; rest CL)
Adj Basis: Cost
Taxation of 1202 (QSBS) transactions
Income: Taxable
Sale at Gain: Cap Gain (excl. 50%; gain rec @ 28%)
Sale at Loss: Cap loss
Adj Basis: Cost
Double basis rule
Basis for Gift rec’d of loss property cannot be determined until ultimately disposed
Gain basis = Donor’s adjBasis, ignoring gift taxes
Gain holding period = carryover
Loss basis = FMV
Loss holding period = Time since gift
Taxpayer Use Test v.
Functional Use Test
Taxpayer: similar
Functional: same
Donee’s basis of appreciated property
Donor’s adj. basis +
gift tax paid * {unreal. apprec. /( FMV - ann. excl)}
