This chapter discusses the tax consequences of selling or trading investment property. It explains:

• What is a sale or trade,
• When you have a nontaxable trade,
• What to do with a related party transaction,
• Whether the property you sell is a capital asset or a noncapital asset,
• Whether you have a capital or ordinary gain or loss from the sale of property,
• How to determine your holding period, and
• When you can make a tax-free rollover of a gain from selling certain securities.

Sales not discussed in this publication. Certain sales or trades of property are discussed in other publications. They include, for example, installment sales, covered in Publication 537, Installment Sales, and transfers of property at death, covered in Publication 559, Survivors, Executors, and Administrators.

Publication 544, Sales and Other Dispositions of Assets, provides information about various types of transactions involving business property.

Publication 550, Investment Income and Expenses (Including Capital Gains and Losses), provides more detailed discussion about sales and trades of investment property. Publication 550 includes information about the rules covering nonbusiness bad debts, straddles, section 1256 contracts, puts and calls, commodity futures, short sales, and wash sales. It also discusses investment-related expenses.

Publication 925, Passive Activity and At-Risk Rules, discusses the rules that limit losses and credits from passive activities as well as the rules that apply to the disposition of an interest in a passive activity.

If you sell your home, different tax rules apply. These rules are discussed in chapter 16.

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