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.

Question

Quizplus · Accepted Answer

Exchanging personal-use property for business-use property does not qualify for nontaxable exchange treatment. The fair market value of the personal property is considered as boot and is subject to taxation.

Abby Exchanges an SUV That She Has Held for Personal