If no gain is recognized in a nontaxable like-kind exchange involving Sec.1245 or Sec.1250 property,the recapture potential carries over to the replacement property.

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If no gain is recognized in a nontaxable like-kind exchange involving Sec.1245 or Sec.1250 property, the recapture potential carries over to the replacement property. This means that the basis in the replacement property will be reduced by any recapture potential that was not recognized in the exchange. Any future sale of the replacement property could trigger the recognition of the deferred recapture potential.

If No Gain Is Recognized in a Nontaxable Like-Kind Exchange