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Business assets: basis, sales, exchanges and repairs

SEE 2 Chapter 18 · IRS outline 2C1, 2C2, 2C3, 2C4, 2C5, 2D5

Copperline is selling an old lathe, trading a warehouse for a bigger one, and replacing a roof it isn't sure about. The city has also just taken a corner of its parking lot for a new road. Walt turns his lake cabin into a rental. Each of these has a tax event inside. Theo has to find out the basis, the gain, the character and whether the tax can wait. Nadia gives him a clean sheet: 'Don't start with the answer. Start with basis.'

In this chapter

1. Basis of business assets
2. Selling assets and section 1231
3. Depreciation recapture
4. Installment sales and asset sales
5. Like-kind exchanges
6. Involuntary conversions and converted property
7. Capitalization and repair rules

This chapter has 7 lessons and 58 practice MCQs with explanations, plus flashcards and a recall sheet.

What this chapter covers

• Basis
• section 1231
• recapture under 1245, 1250 and 291
• installment and asset sales
• like-kind exchanges
• involuntary and personal-use conversions
• capitalization and repair rules

Chapter 17: Casualties, net operating losses and business credits · Chapter 19: Reading the books: statements, methods and reconciliations