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Article: Sale of a residence and like-kind exchanges (Part I: this two-part article examines how recent developments in the principal residence exclusion and like-kind exchanges affect mixed personal- and business-use property. Part I describes the basic interaction between Secs. 121 and 1031.).
- Article from:
- The Tax Adviser
- Article date:
- November 1, 2005
- Author:
CopyrightCOPYRIGHT 2005 American Institute of CPA's. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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EXECUTIVE SUMMARY
* Sec. 121(d)(10) and Rev. Proc. 2005-14 control how mixed personal- and business-use property is handled under the principal residence exclusion and like-kind exchange rules.
* In mixed-use property situations, the taxpayer allocates sales proceeds in the same manner as for depreciation purposes.
* Rev. Proc 2005-14 applies the principles of interaction between Secs. 121 and 1033 to interactions between Secs. 121 and 1031.
Two recent developments have brought into sharp focus the interaction between the Sec. 121 gain exclusion for principal residence sales and the Sec. 1031 gain postponement rules for like-kind ...