Introduction to Step-Up in Cost Basis The concept of step-up in cost basis refers to the adjustment of the taxable value of an inherited asset to its fair market value at the time of the decedent’s death. This provision is particularly significant in the context of inherited properties, as it influences the calculation of capital … Read more
Introduction to Depreciation Recapture Depreciation recapture refers to the taxation of the gain on the sale of an asset that has previously been depreciated. When a taxpayer sells a property that has undergone depreciation, the Internal Revenue Service (IRS) requires that a portion of the gain attributed to this depreciation be reported as ordinary income, … Read more
Introduction to 1031 Exchanges A 1031 exchange, named after Section 1031 of the Internal Revenue Code, is a powerful tax-deferral strategy used in real estate investments. This tax provision allows investors to defer capital gains taxes when they sell one investment property and reinvest the proceeds in another like-kind property. By delaying tax payments, investors … Read more
Introduction to Failed Exchanges Exchanges, specifically in the realm of tax laws, play a significant role in facilitating property transfers while deferring tax liabilities. In Mississippi, like in many states, an exchange allows individuals or businesses to swap properties and potentially benefit from tax advantages under Section 1031 of the Internal Revenue Code. This provision … Read more
Introduction to Like-Kind Exchanges Like-kind exchanges, also known as Section 1031 exchanges, are a provision under the U.S. Internal Revenue Code that allows individuals and businesses to defer capital gains taxes on the exchange of certain types of property. These exchanges are primarily designed for real estate investors and offer a strategic method to defer … Read more