Question

For purposes of IRC §1033 treatment, a taxpayer who acquires replacement property from a related party to replace involuntarily converted property in 2023 may not have more than ______ of aggregate realized gain. A $50,000 B $100,000 C $125,000 D $150,000

Answer 1

Under IRC §1033, in 2023, the replacement property acquired from a related party to replace involuntarily converted property is limited to an aggregate realized gain of no more than $100,000.

Step-by-step explanation:

For purposes of IRC §1033 treatment, in 2023 a taxpayer who acquires replacement property from a related party to replace involuntarily converted property may not have more than $100,000 of aggregate realized gain. This limitation is in place to prevent abuse of this provision by discouraging taxpayers from engaging in transactions that are not at arm's length, as related parties might agree to terms that do not accurately reflect the property's fair market value.