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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29778
Experience:  Taxes, Immigration, Labor Relations
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If I sell a company I own for stock in another company. Is

Customer Question

If I sell a company I own for stock in another company. Is the value of the stock that I received taxed as income, or is it taxed when I sell the stock as capital gains.
Submitted: 7 years ago.
Category: Tax
Expert:  Lev replied 7 years ago.

When you exchange one asset for another - it is treated as two transactions:

-- disposition of the first asset, and

-- purchase of the new asset.


The disposition of the first asset is treated as if you sell that asset at its fair market value. That is a taxable transaction - depending on the basis you have in that asset, type of the asset, and how long you owned that asset - you might recognize a taxable income.


The purchase of a new asset is not a taxable transaction. You might have a tax liability when you sell that asset.


Let me know if you need any help.