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On January 1, 2019, Patrick Polk purchased real estate as an investment. On April 1, 2019, Patrick exchanged it for other real estate in a nontaxable exchange. On February 1, 2020, Patrick sold the real estate for cash and realized a gain. This gain will be treated as a. long-term capital gain. b. short-term capital gain. c. part nontaxable and part short-term capital gain. d. part nontaxable and part long-term capital gain.

Respuesta :

jepessoa

Answer:

a. long-term capital gain.

Explanation:

A 1031 exchange allows investors to delay paying taxes when they swap like-kind properties. The basis of this property will start on January 1, 2019, the date the first property was acquired. If the investor sold the property on February 1, 2020, more than a year passed, so this should be taxed as a long term capital gain.

Parrain

Based on the fact that this real estate had been exchanged for another, this is considered a. long-term capital gain.

The gain will be treated as a long term gain because:

  • Exchanging the property does not change the date of the tax basis
  • The tax basis is more than a year old when the exchanged property is sold

When a tax basis is older than a year when it is sold, any gains realized will be treated as long term gains because they are over a year.

In conclusion, this will solely be treated as a long-term gain.

Find out more at https://brainly.com/question/15704924.

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