If related parties complete a qualified like-kind exchange, how long must the parties wait before disposing of the property exchanged to insure that any realized gain on the transfer is not recognized?
A)No waiting.
B)30 days.
C)6 months.
D)1 year.
E)2 years.

Question

Quizplus · Accepted Answer

To ensure that any realized gain on the transfer is not recognized in a qualified like-kind exchange, the parties must wait at least 2 years before disposing of the property exchanged. This requirement is part of the guidelines to meet the criteria for a like-kind exchange under Section 1031 of the Internal Revenue Code, aiming to prevent abuse of the provision by quickly selling the property after the exchange.

If Related Parties Complete a Qualified Like-Kind Exchange, How Long