Click above to watch the video after the jump If you don’t currently own a Porsche Boxster, you probably wouldn’t mind having one in the garage.
…9freddych 1:54AM (7/22/2010)He probably has to pay income tax on these gains.1031 Like-Kind exchange rules only apply to properties that are held for investment purposes. It’s hard to argue that any of the things he’s trading are for investment purpose as far as the IRS is concerned. On top of this, the IRS has never knowingly allowed 1031 to be applied to cars.Even though he’s trading up little by little, in the end the IRS is going to look at each transaction and treat it as a separate gain. This treatment actually makes it WORSE for him, since the gains should have been reported during each year that the trades were made, so he’ll owe penalties and taxes (I’m assuming he’s never reported any of these transactions).Yes, gains realized during bartering are fair game for the IRS. The liability will be the FMV of the item received less the basis of the item traded. Your new basis in item received is the FMV at the time the barter took place.In the end, his liability will probably the FMV of the Boxter less…
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trading a cell phone into a porsche - craigslist style.
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