tax 171

cash + FMV of noncash property received + liablities seller is relieved of - selling expenses

cost (or other basis at acquisition) + capital additions - capital recoveries (depreciation)

• 1. trade or business loss
• 2. A loss of an activity entered into for profit
• 3. casualty loss.

• purchase=cost
• gift=2 basis gain and loss
• decedent=FMV
• conversion of personal-use property to business-use property= 2 basis gain and loss

• basis=cost  
• stock purchased at different times and prices must document which one sold or assume fifo
• Lump sum purchase=

• dual-basis approach
• donee's basis for gain= Donor's adjusted basis in the property (carryover basis)
• Donee's basis for loss= losser of doner's adjusted basis or FMV on date of gift

• A trade or business loss
• a loss of an activity entered into for profit
• a casualty loss

unrealized appreciation/FMV-14,000

• for business, trade, or investment
• depriciation basis for property acquired by gift= basis for gain

Basis in property= Property's FMV on decedents date of death

• Dual-basis
• Basis for gain= property's adjusted basis @ date of conversion
• Basis for Loss

• Like-kind exchanges
• involuntary Conversions
• Sale of Taxpayer's Principal Residence

Section 1031: No gain or loss shall be recognized on the exchange of property held for productive use in a trade, business, or investment if property is exchanged solely for property of a like-kind to be held for trade, business or investment.