I sold an investment property, closed on 9/1/21 while tried to do a 1031 exchange which had failed and got my fund released from the intermediary company on 2/7/22. I have long term capital gain taxes to pay for the relinquished property.
According to my research, I could choose to "defer your capital gain income tax liability into the following income tax year rather than the current income tax year in which the relinquished property was sold (and closed)."
How can I do this in TurboTax? the software seems to do it for me for the 2021 tax year.
"You should not forget to take depreciation recapture into account. Income taxes due from depreciation recapture can not be deferred into the following income tax year and are due in the taxable year in which you sold (and closed on) your relinquished property."
I need to do depreciation recapture, but not the capital gain, TurboTax seems to do both together.
Also, I have $20k remodel cost, prior to sale, to use as basis to reduce my capital gain amount, but if I'm deferring my gains until next year, do I enter this and use it as a loss to carry to next year? TurboTax advised me to add it as an Asset. Do I add it as "improvement to land" or "Real Estate".
Thanks
