Chapter 11: Property Dispositions

Chapter 11: Property Dispositions

1. Adjusted basis

   • Initial basis - cost recovery allowed (or allowable)

2. Gain or (loss) realized

   • Amount realized - adjusted basis

3. Recognized gains or losses

   • Gains or losses that increase or decrease taxpayers' gross income

4. Section 1231 Assets

   • Depreciable assets and land used in a trade or business held by taxpayers for more than one year

5. Tax-deferred transactions

   • A transaction where at least a portion of the realized gain or loss is not currently recognized
     • Examples: like-kind exchanges, involuntary conversions, installment sales, and other business-related transactions