Gains and losses on nontaxable exchanges are deferred because the tax law recognizes that nontaxable exchanges result in a change in the form but not the substance of the taxpayer's relative economic position.

Question

Quizplus · Accepted Answer

This statement is true. The gain or loss is deferred because there has not been an actual realization of gain or loss due to the exchange being nontaxable. The taxpayer's economic position has essentially remained the same, just in a different form.

Gains and Losses on Nontaxable Exchanges Are Deferred Because the Tax