Recognized Gain 2015-09-16 08:00:00

Recognized Gain

Recognized gain is the taxable portion of realized gains arising from the sale of an asset or assets. Recognized gains are typically less than realized gains due to available tax offsets available to the taxpayer such as loss carryforwards and tax deferral methods employed such as 1031 exchanges

As an example calculation, if an investor had a realized gain of $975,000 but completes a partial 1031 exchange to defer $800,000 of the gain. The difference of $175,000 would be a recognized gain and subject to capital gains taxes in the year of sale.

 


1031 Exchange Guidebook

eBook Cover

The 1031 Investor's Guidebook