Nontaxable and Deferred Transactions
When Gain Recognition Is Deferred
Certain property transactions qualify for nonrecognition treatment, meaning realized gains are deferred rather than immediately recognized. These provisions encourage specific economic activities without immediate tax consequences.
Note
Deferred gain is not permanently excluded—it is generally recognized in a future taxable transaction.
Summary
Nonrecognition provisions postpone taxation while preserving the deferred gain for future recognition.