What is Section 1045 rollover?
In short
Gain on qualified small business stock held more than 6 months can be deferred if the proceeds are reinvested in other qualified small business stock within 60 days.
Key takeaways
- The deferred gain reduces the basis of the new stock.
- The holding period of the old stock carries over to the new stock.
- It helps holders who sell before qualifying for the gain exclusion.
Where it's tested
TCP: Property Transactions: Advanced Planning — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A taxpayer sells equipment with an adjusted basis of $60,000 (original cost $100,000, accumulated depreciation $40,000) for $120,000, receiving payments over four years. What is recognized in the year of sale beyond any installment gain on the first payment?