Property Is Acquired in a Qualifying Like-Kind Exchange

question 64

Multiple Choice

Property is acquired in a qualifying like-kind exchange. The acquired property is sold three months after it is acquired. Which of the following is correct?

• A) Since the holding period of the property given up in the exchange "tacks" to the holding period of the acquired property, the holding period of the acquired property could be long-term.
• B) The holding period of the acquired property is short-term.
• C) The holding period of property acquired in a like-kind exchange is always long-term.
• D) When property acquired in a like-kind exchange is disposed of, the holding period is not relevant.
• E) None of the above.

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Definitions:

Increasing Returns

A condition in economics when an increase in the scale of production leads to a greater proportional increase in output.

Isoquants

Curves that represent combinations of inputs that produce the same level of output, used in production theory.

Output

Output refers to the quantity of goods or services produced by a firm, industry, or economy within a certain period.

Increasing Returns

An economic principle where a proportionate increase in inputs leads to a greater proportionate increase in outputs, typically seen in production processes.