Hello pk - I really appreciate your feedback. I'm answering in response, to possibly help others in the future, since I've already filed my return.
My reading of the IRS instructions for Form 8824, Like-Kind Exchanges, is that it would be incorrect to wait to file the 8824. My relinquished property was sold in Dec 2016 and my replacement property was purchased in Jan 2017. Quoting from the IRS instructions: " When To File: If during the current tax year you transferred property to another party in a like-kind exchange, you must file Form 8824 with your tax return for that year." As you stated, I did use the qualified intermediary ("accommodator") for this exchange, so I did transfer my "sold" property to another party in 2016. I did not see in the instructions that a like-kind exchange is not considered complete until the replacement property is purchased. (You may know more about that than me.)
Your suggestion to handle both the sale and purchase in the same tax year did occur to me, so I did try that. I went back to my 2016 filing in Turbotax and modified the Form 8824 and Asset Entries, to show (incorrectly) that I purchased the replacement property also in Dec 2016. This, however, did not change anything in Turbotax. The Premier version of TT still treated my replacement property as a regular, new rental property, and did not transfer any of the calculated values into the Basis of the replacement property.
In the end, I had to print out and study the 17 pages of Turbotax instructions for the Asset Entry Worksheet, retrieve the key values (Exchanged Basis and Excess Basis are two that I remember) from my 2016 tax return, Form 8824 Worksheet, and enter-by-hand these values into the Turbotax Asset Entry Worksheet for my replacement property (2017 tax return). Not being an expert of any kind in the area of taxes, I was very nervous to have to enter information this way.
I believe my 2016 and 2017 tax filings are correct. But the process was very time consuming and painful. IMO, Turbotax Premiere is a huge FAIL in this area. For anyone trying to use Turbotax Premiere in the future, good luck to you and you may want to consider hiring an experienced tax person, instead of using Turbotax.
