Which of the following would extinguish the § 1245 recapture potential?
A) An exchange of depreciable business equipment for like-kind business equipment with gain realized, but not recognized.
B) A nontaxable incorporation under § 351.
C) A nontaxable contribution to a partnership under § 721.
D) A nontaxable reorganization.
E) None of the above.

Question

Quizplus · Accepted Answer

The § 1245 recapture potential is not extinguished by any of the listed transactions because they are all nontaxable events. The recapture potential carries over to the new property or entity.

Which of the Following Would Extinguish the § 1245 Recapture