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Article: Sale of a residence and like-kind exchanges: 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 II examines how Rev. Proc. 2005-14 applies secs. 121 and 1031 to sales and like-kind exchanges of such property.(part 2)
- Article from:
- The Tax Adviser
- Article date:
- December 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
* Rev. Proc. 2005-14 provides five basic principles for applying the Sec. 121 residence exclusion and Sec. 1031 like-kind exchange rules to mixed-use property.
* The tax consequences of a sale and exchange of mixed-use property vary according to the facts.
* Tax advisers should warn clients that the Sec. 121 exclusion is not available for five years after replacement property is received in a like-kind exchange.
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This two-part article analyzes how a mixed-use property (i.e., some use as both a principal residence and as a business property) is handled for purposes of the Sec. 121 principal ...