In October 2012, Ben and Jerry exchange investment realty in a § 1031 like-kind exchange.Ben bought his real estate in 2002 while Jerry purchased his in 2005.In addition to the realty, Ben receives Pearl, Inc.stock worth $10,000 from Jerry.Ben's realized gain is $30,000.On what date does the holding period for Ben's realty received from Jerry begin? When does the holding period for the stock he receives begin?
A)2002, 2012.
B)2002, 2002.
C)2005, 2005.
D)2005, 2012.
E)None of the above.

Question

Quizplus · Accepted Answer

In a § 1031 like-kind exchange, the holding period for the property received includes the holding period of the property given up. Therefore, Ben's holding period for the realty received from Jerry begins in 2002, when he originally acquired his exchanged property. However, the holding period for the stock received begins on the date of the exchange, which is 2012, because it is not like-kind property.

In October 2012, Ben and Jerry Exchange Investment Realty in a §