Which of the following realized gains results in a recognized gain?
A)Farmland traded for an office building.
B)Sale to a related party.
C)Involuntary conversion.
D)Iowa cropland exchanged for a Minnesota warehouse.

Question

Quizplus · Accepted Answer

A sale to a related party results in a recognized gain, as the transaction is not considered an arm's length transaction and may be subject to special tax rules under the Internal Revenue Code. The other options describe like-kind exchanges, which generally allow for the deferral of recognition of any gain realized.

Which of the Following Realized Gains Results in a Recognized