Can I do this transaction as like kind exchange? Is there anything special I need to do since I section 179 the 2012 equipment?

[lmvembroidery]

Bought equipment in 2010 for $17000 (dep 5 years) & on 1/12/12 for $3000( sec 179 in 2012). In 6/17, I bought new equipment and private saled the old pair for 15500- used this check and the proceeds from the bank loan for the new equipment that I purchased for 42,200.  The bank had me deposit the check and then combined the check amount plus the proceeds from the loan to pay for the new equipment to the dealer.

[SweetieJean]

Did you use a Qualified Intermediary?

[SweetieJean]

<a rel="nofollow" target="_blank" href="https://www.irs.gov/newsroom/like-kind-exchanges-under-irc-code-section-1031">https://www.irs.gov/ne...>

[lmvembroidery]

We started going through the dealer that we purchased the new equipment from but since we both were 4 hours away from the dealer, it was easier to deal with ourselves instead of the dealer marking up my equipment to sell it to the buyer.

[lmvembroidery]

so I would say no but the bank got the money, not me

[lmvembroidery]

this is what I was looking at.   <a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/tax-tips/investments-and-taxes/what-is-irs-form-8824-like-kind-exchange/...>

[TaxGuyBill]

If the proceeds from the sale went into you bank account, no, it does not qualify for a 1031 Exchange.

[lmvembroidery]

It went to the bank account because the bank wanted to make one check for the total purchase price and they already had the check made out for the total loan proceeds to the dealer.  This all occurred the same day.  What about Form 8824 or is that what 1031 exchange is?

[SweetieJean]

The identification must be in writing, signed by you and delivered to a person involved in the exchange, like the seller of the replacement property or the qualified intermediary.  However, notice to your attorney, real estate agent, accountant or similar persons acting as your agent is not sufficient.

[lmvembroidery]

so I'm screwed....  so this means a capital gain of $15500?  Should have traded it instead.

[SweetieJean]

You said upthread that you sold it for $15,500. That's not the gain, right?

[SweetieJean]

<a rel="nofollow" target="_blank" href="http://smallbusiness.chron.com/company-sells-depreciated-asset-70063.html">http://smallbusiness.chro...>

[TaxGuyBill]

Yes it is a Capital Gain, but you may be able to use Section 179 on the new Assets, which would more than offset the Capital Gain (Section 179 would also reduce Self Employment Tax).

[lmvembroidery]

I don't know, what is the gain, the full selling price?.  It was fully depreciated.

[lmvembroidery]

TaxGuyBill, that is what I was thinking.  At least on the gain, there is no self employment tax.