You want to dispose of a building and stock. You owned the building for several years, and it has increased in value from the day you purchased it. Therefore, you know you may need to recognize capital gain unless you can think of any other way to dispose of the building without reporting the capital gain. On the other hand, you owned the stock for less than a year, which has decreased in value. In this case, you know you may need to recognize a short-term capital loss.

You received several offers to acquire the building and stock via exchanges or cash purchases. Does any of those assets qualify for 1031 deferral treatment? How? You want to minimize your tax liability, so what would you do? Discuss the tax issues and your position to dispose of these two assets and reduce the tax. Focus on these two items only. Do not assume any other income/deductions to make your conclusion.

There are no right or wrong answers as long as your analysis/discussion makes "tax" sense.

Answer rating: 100% (QA)

With appreciated stock you can sell your shares over a number of years to spread out the capital gai... View the full answer