If an exchange of property involves the assumption of a liability by the transferee it is treated like boot received by the transferee.

Name: If an exchange of property involves the assumption of a liability by the transferee it is treated like boot received by the transferee.
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Question

Quizplus · Accepted Answer

the transferor will recognize gain under the same rules as in a boot received situation. (It is as if the transferor received cash and then paid oﬀ the liability.)

If an Exchange of Property Involves the Assumption of a Liability