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A like-kind exchange under United States tax law, also known as a 1031 exchange, is a transaction or series of transactions that allows for the disposal of an asset and the acquisition of another replacement asset without generating a current tax liability from the sale of the first asset. A like-kind exchange can involve the exchange of one ...
Given its dependence on the IRS Tax Code, it is a mechanism specific to the U.S., first introduced as early as 1954 with the passage of 26 U.S. Code § 721 [1] though the practice traces back to the 1930s through other tax provisions. The primary benefit of this arrangement is to diversify a large stock position without triggering a "taxable ...
Section 1031(a) of the Internal Revenue Code (26 U.S.C. § 1031) states the recognition rules for realized gains (or losses) that arise as a result of an exchange of like-kind property held for productive use in trade or business or for investment.
In 2014, South Korean Internet giant Daum Communications merged with Kakao Corp to form Daum Kakao in a stock swap deal. The merger ratio was approximately 1.14 so it is regarded as backdoor listing for Kakao. In 2017, Disney acquired most of the 21st Century Fox assets in an all-stock deal valued at $52 Billion ($66 Billion if debt is included ...
An equity swap is a financial derivative contract (a swap) where a set of future cash flows are agreed to be exchanged between two counterparties at set dates in the future. [1] The two cash flows are usually referred to as "legs" of the swap; one of these "legs" is usually pegged to a floating rate such as LIBOR .
A tax rule known as the capital loss carryover offers a major long-term tax break investors can use strategically to reduce what they owe the IRS for years, or even decades, into the future. The […]
This allows investors to lower their tax amount with the use of investment losses. [5] Wash sales and similar trading patterns are not themselves prohibited; the rules only deal with the tax treatment of capital losses and the accounting of the ongoing tax basis. Tax rules in the U.S. and U.K. defer the tax benefits of wash selling at a loss.
Section 355 of the Internal Revenue Code (IRC § 355) allows a corporation to make a tax-free distribution to its shareholders of stock and securities in one or more controlled subsidiaries. If a set of statutory and judicial requirements are met, neither the distributing corporation nor its shareholders recognize gain or loss on the distribution.