Revenue Ruling 72-151
Internal Revenue Service
1972-1 C.B. 224 (1972)
- Written by Abby Roughton, JD
Facts
A taxpayer was the sole stockholder of a corporation. In 1958, the taxpayer purchased land and a house that the taxpayer used as rental-income-producing property. In 1970, the taxpayer exchanged the rental-income-producing real property for certain real and personal farm property owned by the taxpayer’s corporation, including farmland and farm machinery. The taxpayer planned to use the farm property for farming, and the corporation planned to use the rental property to produce rental income. The fair market values of the rental and farm properties were equivalent at the time of the exchange. Under § 1031(a) of the Internal Revenue Code, certain transactions involving the exchange of property qualified for nonrecognition of gain or loss. The Internal Revenue Service issued a revenue ruling discussing whether § 1031’s nonrecognition provisions applied to the taxpayer’s and corporation’s exchange of property.
Rule of Law
Issue
Holding and Reasoning ()
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