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As a tax practitioner, you often get people asking questions concerning the tax effect of property transactions. This year is no exception. You’ve had individual clients ask you the following questions:
I. During the course of the year, I swapped some property for what I consider to be similar property. Is this a taxable event? If so, how do I calculate my gain, if any, and my basis in the property that I received?
II. I own part of a C corporation. During the year, the corporation sold me some property at a loss. What are the tax consequences of this transaction to me and the corporation?
Answer each of these questions, explaining the rules that apply to each property transaction and the possible tax consequences of each.
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