How do I properly input information related to a rental property sale and the associated 1031 exchange?

[maglib]

- choose to "Elect out"  "Elect Out of the Regs in IRC Sec. 1.168(i)-6" which I read to mean "treat the sum of the exchanged basis and excess basis of the replacement property as (a single) MACRS property that is placed in service at the time of replacement".  If you do not elect out and have to treat it as 1 property the remaining basis of the old property gets depreciated over 27.5 years.

 - enter the value from 2017's form 8824 line 25 as the (single) "Depreciable Basis" (line 52), 

If you elect out: you will retain old assets with original depreciation and enter a new asset for the purchase price less land value less sales price of prop.  New asset gets depreciated over 27.5 years.

Asset Entry Worksheet.  Line 58 gives you the option to elect out of §1.168(i)-6.

You really want to use the desktop verision of TT to do this as it has drill down and ability to see forms.  Note, most advance users only use desktop as the functionality is so much better.  How to switch to desktop.

https://ttlc.intuit.com/questions/1901476-how-do-i-switch-from-turbotax-online-to-the-turbotax-softw...

[laa5679]

Thank you for this answer. 

I have a similar question, could you kindly clarify?

To "Elect Out" - answer YES to Line 58, then basis of old property is depreciated over 27.5 yrs?

If answer NO to line 58, basis of old property is depreciated over 27.5 minus  number of yrs prior  depreciation?

I answered NO, but TT still depreciates old property basis over 27.5 years. Can you give step by step procedure to make TT do it correctly? Thanks

[wylerb]

I wish I had an answer since I am running into the same problem. Electing Out=YES gives 27.5yrs depreciation of remaining depreciation balance of relinquished property plus Excess basis, and seems to calculate the depreciation from the Mid-Month when the new one was put in service. Electing Out=NO calculates the same combined amount over the same 27.5yrs, but seems to calculate depreciation for the full year, resulting in a much higher depreciation for the current year, and seeming higher than what it should be. I can live with the YES results, but would like to be able to use both options in case I want to use the NO version. Anyone have more experience in this than I do? Thanks!

[maglib]

You have to have old asset sold and start depreciating a new asset otherwise.  Best to elect out, allow system to keep old asset in place and depreciate it.

Sorry  I did not respond sooner, been ill.