Investors & landlords

Yes, you have calculated the correct basis to apportion to all three buildings you received in the section 1031 like kind exchange. ($208,000). Read the information next.

1. The original property of $90,000 remains in tact as an asset and continues from the original acquisition date.  The remainder basis is apportioned to the new buildings/assets.
2. Enter the 'additional amount' (or buy up fees) as two assets for the additional building(s) and their recovery period begins on the trade date in 2022 (03/16/2022).
3. I suggest entering two new assets by apportioning the remaining additional basis between them. You can do that by using the value of each by the total to apply the percentage against the remaining additional basis. 
   1. When you enter the new rental you will select 'Commercial (non personal use such as business office, warehouses, etc' this will provide the correct 39 year depreciation schedule for the new assets.
   2. To keep it simple I would select that you purchased the assets
4. Part 2: All fees with the exception of marketing would be added to the cost basis as part of the buy up charges.  Add those fees to the assets mentioned above before apportioning it.
5. When you enter the new properties (Add another property for each building), you will select as noted above and they will be depreciated using the correct 39 year recovery.
6. You do need an amount for the land for each building. You have one for the original building, use the formula above to figure out the land value or determine a land value you feel is adequate based on acreage and fair market value (FMV)
7. You may have to file a return in each state where the buildings are located if not in your resident state.
   1. Do I need to file a state return? - Click the states in question to see if you are required to file.  It may be the gross rents and not the net that is required or it may be required simply because you are required to file federal.
8. If you have lending with a new bank for the properties acquired, then you can expense the remaining balance of the finance fees from the original loan.  If not, then you add any additional loan fees or points to the remaining points and amortize them over the life of the new loan.
9. If you believe you meet the requirements to use the qualified business income deduction (QBID) you are entitled to take it.
   1. Can I get the QBID on my rental income? Click the hyperlinks
10. Finally, one Form 8824 should be sufficient.  Keep all of the documents and information that you used to complete the form.