@DianeW777
Hello Diane,
In all fairness, the appropriate cost basis for the Oil and Gas property would be based on its share of the total cost across all 3 replacement properties. Do you agree in principle, and with the numbers below? This is a shame, as it leaves about $56,000 of depreciable basis unusable (written down on a piece of paper). Are there different sound arguments/methods of apportioning a basis that the IRS would accept that would decrease the Oil and Gas property's share of the original and/or additional basis values?
Replacement Properties (3) – DSTs
- $903,000 = Total Replacement Cost to determine basis allocation
- 27.7% = $250,000 = Based on Oil and Gas Purchase Price (Equity)
- 54.6% = $493,000 = Ford Distro Center Purchase price = $250,000 (Equity) and $243,000 (Loan)
- 17.7% = $160,000 = Senior Living Center Purchase price (Equity)
- Original Basis = $90,000
- $24,930 = Oil and Gas = 27.7% * $90,000
- $49,140 = For Distro Center = 54.6% * $90,000
- $15,930 = Senior Living Center = 17.7% * $90,000
- Additional Basis = $112,000
- $31,024 = Oil and Gas = 27.7% * $112,000
- $61,152 = For Distro Center = 54.6% * $112,000
- $19,824 = Senior Living Center = 17.7% * $112,000
Thanks so much Diane!
Jamie
