#### § 1.168(i)-5 Table of contents.

This section lists the major paragraphs contained in § 1.168(i)-6.

## § 1.168(i)-6 Like-kind exchanges and involuntary conversions.

(a) Scope.

(b) Definitions.

(1) Replacement MACRS property.

(2) Relinquished MACRS property.

(3) Time of disposition.

(4) Time of replacement.

(5) Year of disposition.

(6) Year of replacement.

(7) Exchanged basis.

(8) Excess basis.

(9) Depreciable exchanged basis.

(10) Depreciable excess basis.

(11) Like-kind exchange.

(12) Involuntary conversion.

(c) Determination of depreciation allowance.

(1) Computation of the depreciation allowance for depreciable exchanged basis beginning in the year of replacement.

(i) In general.

(ii) Applicable recovery period, depreciation method, and convention.

(2) Effect of depreciation treatment of the replacement MACRS property by previous owners of the acquired property.

(3) Recovery period and/or depreciation method of the properties are the same, or both are not the same.

(i) In general.

(ii) Both the recovery period and the depreciation method are the same.

(iii) Either the recovery period or the depreciation method is the same, or both are not the same.

(4) Recovery period or depreciation method of the properties is not the same.

(i) Longer recovery period.

(ii) Shorter recovery period.

(iii) Less accelerated depreciation method.

(iv) More accelerated depreciation method.

(v) Convention.

(A) Either the relinquished MACRS property or the replacement MACRS property is mid-month property.

(B) Neither the relinquished MACRS property nor the replacement MACRS property is mid-month property.

(5) Year of disposition and year of replacement.

(i) Relinquished MACRS property.

(A) General rule.

(B) Special rule.

(ii) Replacement MACRS property.

(A) Remaining recovery period of the replacement MACRS property.

(B) Year of replacement is 12 months.

(iii) Year of disposition or year of replacement is less than 12 months.

(iv) Deferred transactions.

(A) In general.

(B) Allowable depreciation for a qualified intermediary.

(v) Remaining recovery period.

(6) Examples.

(d) Special rules for determining depreciation allowances.

(1) Excess basis.

(i) In general.

(ii) Example.

(2) Depreciable and nondepreciable property.

(3) Depreciation limitations for automobiles.

(i) In general.

(ii) Order in which limitations on depreciation under section 280F(a) are applied.

(iii) Examples.

(4) Involuntary conversion for which the replacement MACRS property is acquired and placed in service before disposition of relinquished MACRS property.

(e) Use of optional depreciation tables.

(1) Taxpayer not bound by prior use of table.

(2) Determination of the depreciation deduction.

(i) Relinquished MACRS property.

(ii) Replacement MACRS property.

(A) Determination of the appropriate optional depreciation table.

(B) Calculating the depreciation deduction for the replacement MACRS property.

(iii) Unrecovered basis.

(3) Excess basis.

(4) Examples.

(f) Mid-quarter convention.

(1) Exchanged basis.

(2) Excess basis.

(3) Depreciable property acquired for nondepreciable property.

(g) Section 179 election.

(h) Additional first year depreciation deduction.

(i) Elections.

(1) Election not to apply this section.

(2) Election to treat certain replacement property as MACRS property.

(j) Time and manner of making election under paragraph (i)(1) of this section.

(1) In general.

(2) Time for making election.

(3) Manner of making election.

(4) Revocation.

(k) Effective date.

(1) In general.

(2) Application to pre-effective date like-kind exchanges and involuntary conversions.

(3) Like-kind exchanges and involuntary conversions where the taxpayer made the election under section 168(f)(1) for the relinquished property.

[T.D. 9314, 72 FR 9250, Mar. 1, 2007]