I am not at all familiar with 1031 exchanges. But I see no one has responded for about a day now. So I'll throw in what I "do" know about the sale of a rental property and maybe that will help you.
When selling, you split your sales price across all listed assets. Keep this in mind.
- The sales price of all assets must add up to your total sales price.
- The sales expenses of all assets must add up to the total sales expenses.
- If you sell at a gain, then you must show a gain on all assets. Doesn't matter if the gain is $1 on some assets and $100,000 on other assets. A gain, is a gain, is a gain, is a......
If you show a gain on some assets and a loss on others, then the depreciation on those assets that show a loss will not be correctly recaptured and taxed at the ordinary tax rate. Instead, it will be incorrectly included in the gain and taxed at the capital gains tax rate.
Don't know if the above will help you at all with a 1031 exchange. But I figure my attempt to help is better than no help at all. Additionally, I have no doubt that if any of my information is "wrong" for a 1031 exchange, someone will waste no time to jump in and point it out. 🙂
