TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, October 20, 2017

Recent Trends In Like-Kind Exchanges

Gerald Auten (U.S. Treasury Department, Office of Tax Analysis), David Joulfaian (U.S. Treasury Department, Office of Tax Analysis & Romen Mookerjee (Dartmouth), Recent Trends in Like-Kind Exchanges:

Like-kind exchanges enable taxpayers to defer capital gains taxes when certain types of property are exchanged rather than sold. The deferred gains from such exchanges have grown over the years, peaking at over $100 billion before the onset of the Great Recession. Equally noteworthy, the share of corporations of these exchanges has increased in recent years, with much of the corporate deferred gain concentrated in certain sectors and accounted for by a relatively small number of firms.

Contrary to the conventional wisdom, exchanges are not typically dominated by real estate transactions and, in recent years, corporations have accounted for over half of deferred gains.

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