Non-Recognition Transactions of Intangible Assets
Depending on the year in which a transaction occurred, the IRS has different rules for non-recognition of gain for intangible assets. Learn more about the differences between post-2017 and prior to 2018
Prior to 2018
If any Section 197 intangible is transferred in certain transactions that qualify for non-recognition of gain, the transferee “steps into the shoes of the transferor” with respect to the portion of the adjusted basis of the transferee that isn’t more than the adjusted basis of the transferor. The following nonrecognition transactions fall under this rule: subsidiary liquidations (Section 332), incorporation transfers (Section 351), reorganization transfers (Section 361), partnership contributions (Section 731), like-kind exchanges (Section 1031), involuntary conversions (Section 1033).
Post 2017
Generally, for exchanges completed after December 31, 2017, Section 1031 applies only to real property exchanges.