I entered into a partial 1031 exchange in 2023. Sold a rental with ~$260K adjusted basis for $615K. Received cash of $480K which went directly to QI and accepted seller financing for the remainder $135K. Purchased replacement property for $1M using the full $480K cash to cover down payment and closing costs. My understanding is that the $480K qualifies for 1031 treatment and tax deferral. While the $135K note qualifies for section 453 installment sale treatment with the gain spread out during the payment period. 1) Is my understanding of this transaction correct? 2) How do I enter this in TurboTax?
Thanks
