Hi,
With this process I believe TT counts time period before exchange for current year twice for depreciation (for the assets which are part of the exchange).
Two amounts come from -
- current year depreciation amount for the old property asset
- current year depreciation amount for the new asset with the exact same information as the property given up with a new name, but with the same date placed in service as the old property (asset was the part of the exchange)
I'll try to illustrate with a made-up example :
Assume no buy up/added cash.
Following the instructions -
"Continue to the screen 'Confirm Your Prior Depreciation'
- The amount displayed is only for prior years and does not include the current year.
- Continue until you see the current year amount displayed and make a note to add the two amounts together for the Section 1031 like kind exchange."
Prior year depreciation(for 7 years, yearly depreciation of $3000) : $21000
Current year depreciation with the old asset (for one month) : $250
Total of two amounts for Section 1031 like kind exchange : $21250
Later on following the instructions after finishing like-kind exchange -
"Go back to your rental activity and then enter the new assets with the exact same information as the property given up with a new name, but with the same date placed in service as the old property, for all assets that are part of the exchange."
Current year depreciation from the new assets with same date placed in service as the old property : $3000
After this, on Sch E total depreciation for current year for th eproperty is : $250 (from old asset) + $3000 (from new asset with same date placed in service as the old property) = $3250
Isn't $3250 incorrect? Shouldn't depreciation be $3000?
Seems like for the time period old property was owned, its depreciated twice.
Once with the old asset, and once with the new asset (created with exactly the same information as the old property).
Or maybe its ok?
Thanks!
