1. Land value is part of the basis. Don't make this hard, keep this part simple.
You know how much you paid for the property originally. That is $x.
You know how much you spent on improvements to the property $y.
You know how much you paid to sell the property with realtor fees, etc, $z.
You know how much depreciation has been claimed $D
Your adjusted basis is $x +$y + $z minus $D
2. Your picture shows: Property given up, date purchased, sold, adjusted basis answer from #1, AMT basis, FMV (sales price), and mortgage info.
3. Sales expenses as part of the exchange- usually you pay a broker an extra fee for handling the 1031 exchange. You can put that $1,000 or whatever into the basis of the sold property to keep things simple. That way the gain prorates to the new properties.
4. Reduce new property Using 1031 Exchange - Internal Revenue Service
Cost basis of the new property = cost of new property - deferred gain from original property.
For example:
- Buy building A, original cost $250,000, depreciated $150,000, sold $400,000
- if sold, A would have gain of $300,000 but instead did a 1031 exchange.
- Buy building B for $500,000.
- Cost basis for new property B is $500,000 - prop A gain $300,000 = $200,000
The adjusted basis of building A is the exchange basis.
Excess basis = cost basis for new property - adjusted basis of building A
For example:
- Building A adjusted basis is $250,000 -dep $150,000 = $100,000 = exchange basis
- Building B $500,000 purchase price
- Excess basis = purchase -exchange
- Excess = $500,000 - $100,000 = $400,000 excess basis
The adjusted cost basis is the purchase price minus the deferred gain from the property sold.
From my example above:
Cost basis for new property B is $500,000 - prop A gain $300,000 = $200,000
If you have two properties, you will want to allocate the deferred amount based on prices. If building B above plus building C were purchased then:
- Building B purchase price $500,000
- Building C purchase price $300,00
- Then building B is 500/800 =62.5% of replacement to take that portion of the deferred gain.
- Building C is 300/800 = 37.5% of the deferred
References:
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