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

Question

Quizplus · Accepted Answer

Exchanging personal use property for business-use property does not qualify for nontaxable exchange treatment under Section 1031 of the Internal Revenue Code. Therefore, Abby may be subject to capital gains tax on the exchange.

Abby Exchanges an SUV That She Has Held for Personal