Hey Vic_R. Thank you for your detailed and informative post.
1) Mea Culpa ... found an error in my description of how to compute Excess Basis: before multiplying by the percentage the building is of the purchase price plus exchange expenses, need to subtract the Adjusted Basis of the relinquished property from the New Basis of the Replacement property (8824 Line 25). That is how it is done in the examples
2) Thanks for the notes on the different types of costs
3) Agree with you that it is simpler to depreciate all assets going forward as new assets with new life. And yes, I have taken the more complicated approach of splitting up the New Basis of the Replacement Property between the remaining depreciation of the relinquished property and the now "Excess Basis" of the replacement property. IMO, this seems to give me higher depreciation deduction for the remaining basis of the relinquished property over its remaining life versus treating as a new asset reset to year 1 of its depreciation schedule. And yes, also splitting out different assets types to get appropriate asset life.
4) Regarding the Like-Kind Exchange tax reporting calculations (8824) to fully defer capital gain, found the worksheet included in the workbook at https://www.1031.us/wp-content/uploads/Form8824Workbookfor2019-Draft.pdf most helpful.
5) Regarding Like-Kind Exchange rules, in general, have done the following that seems to avoid the pitfalls
a) Purchase price in total of replacement property(ies) greater than selling price of relinquished property
b) Loan amount(s) in total of replacement property(ies) greater than loan amount of relinquished property
c) Take no cash out
d) Adhere to all timelines for property identification and purchase
5) That's good advice to have a CPA or Tax Preparer review my work. Have already been working on lining someone up to do this.
6) Not taking advantage of Fed Special Depreciation rules as my state does not allow this and prefer to keep my Fed and State returns consistent, so opt out of it when TT presents the option to choose.
7) Doing the same as you are and leveraging Turbo Tax to do the depreciation calculations by inputting the values it needs. Took a bit of effort to figure out how to do this without having to use "override" feature for some of the automatically calculated fields.
😎 Learned about the validity of carrying forward of passive activity losses in our previous Like-Kind Exchange five years ago. Thanks for reminding me.
Thanks again for your detailed and informative post. Good luck to us all and be safe.
