Taxable Transaction

A taxable transaction is any event that generates a gain or loss you have to report on your tax return for the current Tax Year, e.g., a sale of appreciated property for cash.


Under the tax code, any sale, exchange, or other disposition of property may generate taxable gain or loss unless the code provides a specific exception, e.g., a Section 1031 Exchange.


A “fully” taxable transaction is a good thing if you have “suspended” passive activity losses. See Passive Activity Rules.