Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

What is the difference between “realized” gain and “recognized” gain?

April 26, 2017gain realized recognized

0

10 Posted

What is the difference between “realized” gain and “recognized” gain?

2 Answers

0

10 Posted

Realized gain is the increase in the taxpayer’s economic position as a result of the exchange. In a sale, tax is paid on the realized gain. Recognized gain is the taxable gain. Recognized gain is the lesser of realized gain or the net boot received.

1

Posted

Realized gain is defined as the economic gain resulting from selling as asset at a higher price than the original purchase price. Recognized gain is that which is taxable as capital gain. Recognized gain in a 1031 exchange is the realized gain or the net boot received, whichever is less.