Allocation of land in Exchanged (carryover) basis and Excess (additional) basis after 1031 Exchange

[Dave918]

I am following the procedure described in the Turbotax article below for a 1031 Exchange of one rental house (building and land) into another rental house. Step 3 describes the process of creating the new asset entry worksheets but it does not mention entering a value for land on line 8 of the asset entry worksheet. I'm pretty sure the IRS would expect some of the new asset to include land since it's a house which sits on land. Would it be reasonable to allocate the land value by using the percentage of land on the tax assessors records and applying that percentage to the Exchanged (carryover) basis and the Excess (additional) basis? For example if the tax assessment is 15000 for land and 100000 total property value and the Exchange basis was 20000 and the excess basis 40000 then the land for the Exchanged basis would be 15% of 20000 = 3000 and the land for the excess basis would be 15% of 40000 = 6000? Does this sound correct? Thank you in advance for your response.

Completing a like-kind exchange in the 1040 return

https://proconnect.intuit.com/support/en-us/help-article/federal-taxes/completing-like-kind-exchange...

[AmyC]

1. Once the 8824 is complete, you can enter the new property with the new basis. When asked for the land value of the new rental property, entering the amount from the tax assessor's records is fine.

2. No, the land is the land. The value of the land is not affected by the 8824 and other issues. See another post of mine here regarding the 8824 and land.  

There are two ways to handle depreciation after a 1031. Turbo Tax only handles one method well, the single schedule depreciation. It is simple, you take your new adjusted basis, begin depreciation fresh on the new property based on the type of property. The new building could have a different depreciation schedule from the old property,  39 vs 27.5 years.

It sounds like you have adjusted the basis and begun a fresh depreciation but maybe not.

If you are trying to use the 2 schedule method, you will have one depreciation for each property and the basis is not adjusted on the second property since you are still depreciating the first/ relinquished property.

[Dave918]

I’m using the 2 schedule method. Just to clarify the value of the land from the old (exchanged) property does not change (even if the new property is a condo without land)?