1031.Exchange INTELLIGENCE NETWORK
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TAX & BASIS

Recognized gain

Also called: taxable gain · gain recognized

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PLAIN-ENGLISH DEFINITION

The portion of gain included currently for tax purposes.

What it means in practice.

In a qualifying like-kind exchange, some realized gain may not be recognized currently. Money or other non-like-kind property and other factors can create recognized gain.

Why it matters.

This is the concept most investors mean when asking “how much is taxable now?”

Additional notes.

In a qualifying like-kind exchange, some realized gain may not be recognized currently. Money or other non-like-kind property and other factors can create recognized gain.

PRIMARY / REFERENCE SOURCES

Read the source material.

irs.gov ↗irs.gov/businesses/small-businesses-self-employed/like-kind-exchanges-real-estate-tax-tipsirs.gov ↗irs.gov/publications/p544
CONNECTED LANGUAGE

Related definitions.

Tax & BasisRealized gainThe economic/tax gain generated by the disposition before determining how much is currently recognized.Tax & BasisBootCommon exchange-industry shorthand for money or non-like-kind property received in an exchange that can trigger recognized gain.Tax & BasisDeferred gainGain that is not recognized currently because qualifying exchange treatment applies.
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