When is gain recognized on the sale of Qualified Replacement Property?
During the first 12 months after the sale to the ESOP, the selling shareholder may use the proceeds to buy and sell securities as often as desired. During this period, any gains over the purchase price for the securities are taxable. When the selling shareholder has purchased the securities which constitute Qualified Replacement Property, the shareholders basis in the Qualified Replacement Property will equal the cost of the Qualified Replacement Property less the amount of gain not recognized. In a subsequent sale or disposition of all or any portion of the Qualified Replacement Property, taxable gain will be recognized to the extent the selling price exceeds the shareholders basis as transferred to the Qualified Replacement Property. Selling shareholders who desire to actively trade the securities in their portfolio can use floating rate notes to avoid the capital gain taxes that are incurred when Qualified Replacement Property is sold. These long-term notes constitute Qualified Repl
During the first 12 months after the sale to the ESOP, the selling shareholder may use the proceeds to buy and sell securities as often as desired. During this period, any gains over the purchase price for the securities are taxable. When the selling shareholder has purchased the securities which constitute Qualified Replacement Property, the shareholders basis in the Qualified Replacement Property will equal the cost of the Qualified Replacement Property less the amount of gain not recognized. In a subsequent sale or disposition of all or any portion of the Qualified Replacement Property, taxable gain will be recognized to the extent the selling price exceeds the shareholders basis as transferred to the Qualified Replacement Property. Selling shareholders who desire to actively trade the securities in their portfolio can use floating rate notes to avoid the capital gains taxes that are incurred when Qualified Replacement Property is sold. These long-term notes constitute Qualified Rep
