TAX & BASIS
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Realized gain
Also called: economic gain · gain realized
The economic/tax gain generated by the disposition before determining how much is currently recognized.
What it means in practice.
In simplified terms, gain is measured by comparing the amount realized with adjusted basis, subject to the tax rules. A 1031 exchange may defer recognition of some or all of that realized gain.
Why it matters.
Realized gain and taxable gain are not always the same number.
Additional notes.
In simplified terms, gain is measured by comparing the amount realized with adjusted basis, subject to the tax rules. A 1031 exchange may defer recognition of some or all of that realized gain.
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