This Article seeks to improve the like kind and involuntary conversion rules, that is, make the provisions more rational and less complex, by analyzing them in light of the fundamental tax policies of efficiency, equity, and administrability. A review of these rules under efficiency and equity principles arguably will lead to a more rational scheme for providing nonrecognition treatment to voluntary and involuntary dispositions given the recognized importance of these policies in structuring the federal income tax system. Further, a careful consideration of tax administration concerns should serve to simplify the application of these nonrecognition provisions. Part II of this Article reviews the fundamental tax policies of efficiency, equity, and administrability. Part III examines the policies underlying the like kind and involuntary conversion rules and identifies the fundamental policies that may support these provisions. Part IV develops a methodology for reforming the like kind and involuntary conversion rules in light of fundamental tax policies that, in part, recognizes the limits of efficiency and equity analyses and the importance of administrability concerns. Part V the applies this methodology for reform to several features of the like kind and involuntary conversion rules, and recommends an approach that is general simpler, more, rational, and more unified. Part VI summarizes and concludes the Article.
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