When a taxpayer is released from a liability in a like-kind exchange,the amount of the release:

Question

Quizplus · Accepted Answer

When a taxpayer receives boot in a like-kind exchange, it may trigger gain recognition. Boot is defined as any non-like-kind property received in the exchange, including cash, notes, or any other property that is not of like-kind to the property being exchanged. If the taxpayer is released from a liability as part of the exchange, that amount is treated as boot and may trigger gain recognition. Therefore, choice B is correct. Choices A, C, and D are not correct because they do not accurately describe the treatment of a liability release in a like-kind exchange.

When a Taxpayer Is Released from a Liability in a Like-Kind