Recognized Gain

The amount of gain reported for income tax purposes.

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You can defer recognizing some gains until the following year(s).

In a Tax-Free Exchange, portion of gain that is taxable. A Realized gain will generally be recognized to the extent of boot received. See also Section 1031.

In a Tax-Free Exchange the portion of gain that is taxable. A Realized Gain will generally be recognized to the extent of Boot received. See Section 1031.
Example: Abel's land has a Tax Basis of $10,000. It is worth $75,000. He exchanges the land under Section 1031 for Baker's warehouse worth $70,000 and $5,000 of cash. Of Abel's $65,000 realized gain, $5,000 will be recognized. The $60,000 of unrecognized gain is deferred.