Hi Mike (and/or other folks),
I am sorry for the delay in getting back to this. I ended up getting side tracked which resulted in a couple of new Questions?
And I was wondering if the values I would use in forms 8824, 4797 and Schedule D look ok?
- When I look at the fields in the form 8824, I do not see places to enter:
* Given Up Property's initial Basis
* Given Up Property's FMV / Sales price
- What happens to the Sales Expenses of the Given Up Property?
* Are Sales Expenses supposed to be added to the basis of the Replacement property?
Or
* Are Sales Expenses used (some where behind the scenes) to decrease realized gain?
Thank you for any help with these last questions,
Jeff
Below is the Exchange Info and Values that would be entered on forms 8824, 4797 and Schedule D. To make this part of the note shorter I skipped some Sections or Lines.
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Here are the numbers from the Exchange.
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Property Given Up cost: $ 388,562
Depreciation taken Given Up property: $ 124,516
straight-line - no recapture needed
Given Up Adj basis ($388K - 124K) of: $ 264,046
Given Up property FMV - Sold for: $639,000
No mortgages/loans transferred or paid off.
Not between related parties.
Given Up sales / exchange expenses: $35,161
for commission, transfer tax, attorney, recording
Received Property cost: $598,679
plus fee paid from Sales proceeds:$2,860
Received Property FMV: $ 601,539
No loans assumed or used.
Remaining 'Boot' cash payment received: $2,300
No 'not like-kind' property was involved.
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Cash flow of the "Exchange bucket"
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Cash from Given Up Sale: + $ 639,000
less Sales expenses: - $ 35,161
less cost of Received: - $ 598,679
less Received property fees: - $ 2,860
Less Boot payment: - $ 2,300
Bal at end of exchange: $ 0
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Values used for the Form 8824
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15) Cash received, etc: 2,300
15a) description: "cash boot"
16) FMV of like-kind property received: 601,539
17) Add lines 15 and 16: 603,839
18) Adj Basis of property Given Up: 264,046
19) Realized Gain (subtract line 18 from 17): 339,793
20) Enter smaller of line 15 or line 19: 2,300
21) Ordinary Income under recapture rules: 0
22) Subtract line 21 from line 22: 2,300
23) Recognized gain (add lines 21 and 22): 2,300
24) Deferred gain (subtract line 23 from 19): 337,493
25) Basis of like-kind property received: 264,046
(subtract line 15 from the sum of line 18 & 23)
25a) Basis of like-kind section 1250 received: 264,046
25b) Basis of like-kind section 1245 received: 0
25c) Basis of like-kind intangible property received: 0
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Values entered in Form 4797 Sales of Business Property
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5) Section 1231 gain from like-kind exchanges from 8824: 2,300
7) Combine lines 2 thru 6: 2,300
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Values entered in Schedule D
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11) Gain from form 4797...or 8824: 2,300
15) Net long-term capital gain: 2,300
Thanks Again,
Jeff
