substituted basis
- The value of a received property in a like-kind exchange which is considered equivalent to the value of the property exchanged, while taking into account any additional payment received or profits and losses incurred
- In the property transaction, the accountant determined the substituted basis to ensure the fairness of the exchange.
- The IRS requires an accurate calculation of the substituted basis during a like-kind property transaction for tax purposes.
- Understanding the concept of a substituted basis is crucial for any real estate investor involved in property exchanges.
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