carryover basis

carryover basis

In tax accounting, the retention of an earlier basis (adjusted acquisition cost) in property even though the property has changed hands.This happens most often in two instances: (1) Someone acquires property by gift. The basis is the same as it was in the hands of the donor, adjusted upward for any gift taxes paid by the donor.(2) In a 1031 exchange,in which like-kind property is exchanged for other like-kind property in a sort of perfectly legal accounting sleight of hand, the basis in property acquired is the same as the basis in the property given up,even though both might currently have substantially different fair market values.

References in periodicals archive ?
With the transfer, Newco Si steps into P's shoes for the carryover basis.
Carryover basis on inherited assets may be lower than expected for some.
In a B reorganization, the acquirer's tax basis in the newly acquired Target stock is the surrendering transferor's basis in the stock (or carryover basis under section 362(b)).
Instead, heirs' basis in assets they inherit is determined under the modified carryover basis rules in IRC [section] 1022.
51) With the [section] 338 election, the acquiring corporation takes a cost basis in the target corporation's assets, (52) whereas if no election is made, the acquiring corporation takes a carryover basis.
Under the 2010 act, executors of 2010 estates can elect out of the estate tax and back into carryover basis.
As an alternative, estates may elect to be taxed as if the original 2010 rules applied (as if there were no estate tax and the modified carryover basis rules applied).
The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) repealed the federal estate tax and replaced it with a carryover basis regime that is effective on the estates of those who die after Dec.
While the estate tax has been repealed, the onerous carryover basis rules for taxing the gain on appreciated assets must be recognized.
As a result, there is currently no estate tax and a carryover basis regime is in place.
estate tax and introduction of a modified carryover basis system for