Hello Vic-R and thank you for your post. I am not clear about the number on Line 25 of Form 8824, the Basis of like-kind property received. Seems to me that it is the basis only to be used for determining the capital gain of the replacement property if you sell the replacement property. I am confused on how we can use this number on Line 25 of Form 8824 for depreciation purposes because it is derived from Fair Market Value (FMV) numbers for both relinquished and replacement properties, and the FMV includes land which is not depreciated. And confused I am, after doing some internet research.
My thinking is leading me down the path of continuing the depreciation schedule of the building of the relinquished property as carryover depreciation as if the property was never sold and separately depreciating the building of the replacement property over 27.5 years. Where I am stuck is how to calculate the "Excess Basis" to depreciate for the building of the replacement building. Do I subtract from the value of the building of the replacement property the remaining un-depreciated basis of the building of the relinquished property, or do I subtract the value (cost) of the relinquished property's building at the time I bought the property?
Getting to the point of giving up and handing over my tax preparation to someone who professionally does tax returns that include real estate and 1031 exchanges.
Thanks again for your post.
