When an asset is sold for more than its original cost, there is gain which the IRS will tax at the “capital gains tax rate”. The amount of capital gain is calculated by taking the selling price of the asset minus its “adjusted basis”
Exchanges may be fully tax-deferred or partially tax-deferred and partially taxable. An exchange will be partially taxable if the taxpayer receives net non-like kind property, (boot) in the exchange.
Most banks offer borrowers fixed rate financing in the form of a fixed rate loan or a variable rate loan combined with a fixed rate swap. Two important factors need to be considered by borrowers when deciding which form of the financing to accept.