Property Taxation

General formula:

Amount Realized
<Adjusted Basis of Asset Sold>
Gain/(Loss)

Amount Realized includes: 

1. Cash received = boot (taxable if gain)
2. Assumption of debt by buyer (Excess = boot; taxable if gain)
3. Property received at FMV
4. Services received at FMV
5. <Amount realized reduced by any selling expenses (broker's commissions)>

Adjusted Basis of Asset Sold

1. Purchased property basis = cost
1. add basis: capital improvements
2. <reduce basis: accumulated depreciation>
2. Gift property basis = donor's rollover cost basis = rollover cost/NBV
1. Exception: Lower FMV at date of gift --> Sell lower (future selling price will determine basis)
3. Inherited property basis: Step up/down to FMV
1. Date of death FMV = basis
2. Alternative valuation date for FMV = earlier of distribution date of asset or 6 months after death/distribution
3. Long term property 

Gains that are not recognized/taxable:

1. Homeowners exclusion 
2. Involuntary conversion 
3. Divorce property settlement
4. Exchange of like kind (business)
5. Installment sale
6. Treasury capital & stock

Losses that are not recognized/deducted:

1. Wash sale losses
2. Related party losses
3. Personal losses