Form 4797 for 1031 Disposal

[llnws]

I am using TurboTax to Form 4797 to record the sale of my 1031 property. I had one property, executed one exchange, and now sold new replacement property.

Part I, Number 2: Do I enter the land value of the latest (replacement) property or the original property?

Part I, Number 5: Do I enter the gain from the sale for the original property? 

Part III, Number 20: Is this the gross sales price of the building for the replacement property?

Part III, Number 21: Is this the cost basis for the replacement property?

Part III, Number 22: Is this just for the 1250 portion of prior depreciation entered on my tax returns?

    Assuming yes, where do I enter the 1245 prior depreciation?

Part III, Number 22: Do I include all the depreciation from the original property plus the replacement property depreciation?

Greatly appreciate input!

[M-MTax]

Number 1 question is whether you had two depreciation schedules or added the remaining basis to the replacement property. That's an election you would have made at the time you reported the 1031.

[llnws]

I used 2 depreciation schedules. 1. Continued depreciation of original property to date of sale in 2020. 2. Depreciation schedule for cash infusion/improvements to get the property to a rentable state. I have a gain on both properties. 

[M-MTax]

Not what I meant.....whether you elected out of the rule..........https://www.expert1031.com/sites/default/files/ElectingOut.pdf

[DianeW777]

The sale of the property received from your previous Section 1031 trade should be reported in the asset section for each asset that is sold.

The selling price should be prorated for each asset then entered for each asset when you indicate they were sold or disposed of. You will not lose the remaining depreciation because you will use the remaining basis against the selling price to determine gain or loss. 

To figure out the selling price for each asset:

1. Take the current basis of each asset against the total combined basis of all of your assets to figure out the sales price for each one; OR 
2. Determine a fair market value for each asset against the total value of all assets to figure out the sale price for each one. 

You need to dispose of the property by telling the software how and when it was disposed of.  Follow these directions.

1. Down the left side, click Federal
2. Click on Income & Expenses
3. Under Your income and expenses, scroll down to
4. Rental properties and royalties, click Edit/Add (or if not residential property, business or farm)
5. Do you want to review your rental, or C or F?, click Yes
6. Click Update to the right of Assets/Depreciation.
7. Do you want to go directly to your asset summary?, click Yes and Continue
8. Click Edit to the right of the assets to be disposed
9. Go through several screens until you get to Tell Us More About This Rental Asset
10. Click on This item was sold…….
11. And continue to answer the questions

See also here.