The nonrecognition treatment on realized gains of an indirect involuntary conversion of a factory building under § 1033 is elective, while a like-kind exchange of computers under § 1031 is mandatory.

Question

Quizplus · Accepted Answer

Nonrecognition treatment under § 1033 is elective, while a like-kind exchange under § 1031 is mandatory. This means that taxpayers may choose whether or not to recognize the realized gains from an indirect involuntary conversion of a property under § 1033, while they must exchange their property for another like-kind property and not recognize any gains under § 1031.

The Nonrecognition Treatment on Realized Gains of an Indirect Involuntary