1. Maybe. When you say improvements added to the basis, that depends on when you did the improvements.
- If you did improvements before renting, they were already added to the basis for depreciation.
- If you did improvements while renting, they were added into assets and being depreciated.
- If you did improvements after renting, then they would be added to your basis.
Generally, for example:
- Buy building A, original cost $250,000, depreciated $150,000, sold $400,000
- if sold, A would have gain of $300,000 but instead did a 1031 exchange.
- Buy building B for $500,000.
- Cost basis for new property B is $500,000 - prop A gain $300,000 = $200,000
2. No taxes on a qualified 1031 exchange.
3. It depends:
- If you have not been subject to AMT tax, it will be the same depreciation amount.
- If you have been subject to AMT tax, locate your Forms 6251 from prior returns and add up the allowed amounts of depreciation.
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