When are gains on similar asset exchanges deferred?

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  Part 2 of the problem discusses how to record a tax deferred trade of a capital asset when no gain is currently reportable.

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  Alternatively, it can ask B for a depreciable asset with a fair market value of $400 as boot; A could then take the Section 179 expense allowance on the asset to offset the tax it will need to pay on the $400.

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• If we reduce expected tax payments, we should do it?

  TAX DEFERRED EXCHANGES There are times when taxpayers can make trades in kind (like-kind exchanges) or sell and buy it back, in order to release losses and reduce taxes.

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