Скачать или смотреть Deferring the Tax Hit After Loss: Section 1033

Deferring the Tax Hit After Loss: Section 1033

When disaster strikes and property is destroyed or condemned, taxpayers face not only the loss but also potential tax on any gains from compensation such as insurance or settlement proceeds. Yet, there's a silver lining in the Internal Revenue Code: Section 1033, which provides deferral of gain on involuntary conversions. This provision allows taxpayers to postpone tax on the gain if they've had property destroyed, seized, or condemned. Instead of taking the tax hit now, you can elect to defer and use those funds to get back on your feet. Here's how it works: if you receive compensation that exceeds your property's adjusted basis, typically you'd have to recognize this gain. But with section 1033, you can delay this recognition by reinvesting in similar property. It’s a crucial tool for those recovering from an unexpected loss, potentially providing much-needed financial savings.

#kimandrosadollp #taxlawyer #tax #section1033 #exchange