Abby exchanges an SUV that she has held for personal use plus $24,000 for a new SUV which she will use exclusively in her sole proprietorship business.This exchange qualifies for nontaxable exchange treatment.

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When property is exchanged for other property that will be used for business purposes, it is generally not considered a like-kind exchange and may not qualify for nontaxable exchange treatment. Additionally, the fact that Abby used the SUV for personal use before exchanging it for a business SUV further complicates the tax treatment of this transaction.

Abby Exchanges an SUV That She Has Held for Personal