Sale of a residence and like-kind exchanges (Part I: this two-part article examines how recent developments in the principal residence exclusion and like-kind exchanges affect mixed personal- and business-use property. Part I describes the basic interaction between Secs. 121 and 1031.).

From: The Tax Adviser | Date: November 1, 2005| Author: Dilley, Steve; Orbach, Kenneth N. | Copyright information

EXECUTIVE SUMMARY

* Sec. 121(d)(10) and Rev. Proc. 2005-14 control how mixed personal- and business-use property is handled under the principal residence exclusion and like-kind exchange rules.

* In mixed-use property situations, the taxpayer allocates sales proceeds in the same manner as for depreciation purposes.

* Rev. Proc 2005-14 applies the principles of interaction between Secs. 121 and 1033 to interactions between Secs. 121 and 1031.

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