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Failed 1031 Tax Exchange
We attempted to do an Improvement 1031 Tax Exchange to buy land and build a new house because the town we live in is small and during our 45 day identification time we could not find any homes to buy. We paid the QI a fee of $5000 that was deducted from our closing proceeds. Because of Covid and other situations beyond our control the house is no where near being completed, so far we spent $255,000 on the replacement property, the relinquished property sold for over $400k after closing costs. We have with a taxable capital gain of $189,866. There were so many delays that we will have to pay more taxes on the boot than we will if we just pay the capital gains to Federal, State, and the recapture taxes. I would like to know if the $5000 we paid for the failed 1031 fee can be deducted from our capital gains on the relinquished property, since we are not completing the 1031? Also will we need to pay quarterly taxes on the money we will owe for the capital gains?
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Failed 1031 Tax Exchange
Won't find official authority for a failed exchange due to no one's fault but you should be able to deduct that $5k as a sales expense.....
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Failed 1031 Tax Exchange
Won't find official authority for a failed exchange due to no one's fault but you should be able to deduct that $5k as a sales expense.....
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