Taxable and Nontaxable Sales/Exchanges

Question 1

A loss from the sale, exchange or worthlessness of 1244 stock

Answer 1

is treated as an ordinary loss, rather than a capital loss.

This is normally advantageous since capital losses are limited to offsetting only $3,000 of ordinary income per year

Question 2

Section 1244 losses

Answer 2

can fully offset ordinary income and are included in the computation of a net operating loss as a business loss. Up to $50,000 ($100,000 for married filing joint) per year of losses may qualify as ordinary 1244 loss in a tax year. The excess is treated as a capital loss

Question 3

Generally, single taxpayers may exclude $250,000 of gain on the sale of a principal residence. If the residence which was sold has not been occupied for at least two years

Answer 3

the $250,000 exclusion is prorated if the sale is due to a change in place of employment, health, or unforeseen circumstances as provided in the regulations

Question 4

Like Kind Exchange Swaps Rules

Answer 4

Required swaps are:

real estate for real estate and
personal property for personal property.

Question 5

What Like Kind Exchange property must be exchanged only for similar items?

Answer 5

Office furniture
Computers
Airplanes
Automobiles
Buses
Light trucks
Heavy trucks