I completed a 1031 exchange on residential rental property. The fair market value of the property I gave up minus the principal amount of the mortgage that was paid off on the given up property exceeds the fair market value of the new property I exchanged into minus the amount of the mortgage I assumed on the new property. Turbotax step by step assumes that I received cash in the amount of this difference; however, the Turbotax calculation completely ignores exchange expenses which if subtracted from the fair market value of the property given up reduced by the principal amount of the mortgage paid off is less that the difference between the fair market value of the property I acquired less the principal amount of the mortgage I assumed, meaning that I actually paid some cash to acquire the new property. I cannot figure out how to fix this either using the form or step by step.
