Mr. Lexon owns investment property with a $719,000 basis. If the property is worth only $500,000, Mr. Lexon would prefer a taxable disposition of the property over a like-kind exchange.

Question

Quizplus · Accepted Answer

A taxable disposition would allow Mr. Lexon to recognize a loss of $219,000, which could be used to offset other capital gains or reduce his taxable income. A like-kind exchange would defer the recognition of the loss until the replacement property is sold.

Mr Lexon Owns Investment Property with a $719,000 Basis