1031 Exchange of 2 properties relinquished for 2 properties acquired

Forum|Forum|8 months ago
September 27, 2025
1 reply
17 views

I have been using TT desktop software for about 25 years for filing my taxes. In that period, I have had work income, investment income and loss, multiple rental properties income and expenses, etc. Using TT for those topics was very straightforward for many years, until when I sold 2 rental properties in a like-kind exchange and bought 2 other rental properties with the proceeds, all in the same year and within the 1031 required timelines. I am having difficulty figuring out how to enter those sale and purchase transactions in TT.

Here is a quick rundown of the events: I relinquished 2 residential rental properties (2 sales) and used the "combined pooled proceeds" from those sales, I acquired 2 other residential rental properties (2 purchases), all in the same year. Per 1031 exchange rules, the chronological timeline of those transactions (i.e., 45-day rule and 180-day rule) permit the pooling situation. The transactions occurred in this order: Property 1 (in California) was sold, then property 2 (in Florida) was sold, then properties 3 and 4 (both in Massachusetts) were purchased. The qualified intermediary for both exchanges was an expert at IPX1031.

Adding to the complexity is that property 1 had been my primary residence before being converted to a rental property. That property meets the timeline requirements for claiming the $250,000 exclusion. When property 1 was sold, it had been a rental property for a little over 2 years. Hence, the property was sold in a 1031 exchange transaction. I need to enter that sale as a 1031 exchange in TT while also claiming the $250,000 exclusion for principal residence.

I also have other income from other rental properties, other work income, investment income and loss, etc., but I do not need help with any of those. Thank you in advance for your time and input. BTW, the filing is for the year 2023. Don't ask me why "now" filing the 2023 return. It's complicated due to federal disaster declarations, etc. Thank you!

AmeliesUncle

Level 15

@sfvaziri3913 wrote:
I sold 2 rental properties in a like-kind exchange and bought 2 other rental properties with the proceeds, all in the same year and within the 1031 required timelines.

TurboTax is not set up to correctly report that.

I suggest going to a good tax professional that is experienced with 1031 Exchanges.

M-MTax

Level 15

I believe @AmeliesUncle is correct. I think you might be able to get it entered correctly if, and only if, you used forms mode (in the installed - desktop -products) but it is going to be an absolute mess and would likely require one or more overrides (NOT recommended!).

Find a tax pro in your area as @AmeliesUncle suggested and make sure they're experienced in 1031 exchanges.

https://taxexperts.naea.org/expertdirectory

user17591282960

Level 2

Thank you @AmeliesUncle and @M-MTax for your input.

@M-MTax : I am using the installed desktop version of TT. What you are saying about the Forms mode makes sense, though I have never needed to use that in the past. If I worked with a tax professional who is experienced in 1031 exchanges, and they walk me through which forms I should fill out, and in what order, I think I could at least give it a try and ask them to review my work after I complete all entries.