Jim Junction purchased a truck for business on November 17, 2009, for $40,000. On July 21, 2010, he exchanged the truck for another truck in like-kind exchange. The new truck had a fair market value of $42,000. When does the holding period on the new truck begin and what is its basis?© BrainMass Inc. brainmass.com March 21, 2019, 9:19 pm ad1c9bdddf
IRC section 1231(a)(1) states that "No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment. " IRC section 1231(d) states that ...
After citing and discussing the Internal revenue Code provisions regarding the holding period and basis in like-kind property, this solution illustrates how to apply the law.