Section 3: 5–15%R12
Nontaxable Exchanges and Involuntary Conversions
Exam Insight
Like-kind exchanges, involuntary conversions, and the home-sale exclusion all defer or exclude gain — but each has a precise boot, basis, and timing rule the exam loves to test.
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What AICPA Wants You to Know
- 1Apply §1031 like-kind exchange rules (real property only post-TCJA)
- 2Compute recognized gain when boot is received and the resulting substituted basis
- 3Apply §1033 involuntary conversion deferral and replacement periods
- 4Apply the §121 personal residence gain exclusion
- 5Identify related-party and timing restrictions