Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Level 3
posted Oct 25, 2022 8:59:02 AM

I had a personal distribution on a 1031 exchange, where do I put this in Turbo Tax?

OK, so am reading that I need to put a 1031 exchange into Turbo tax as a 1031 exchange. 

In the sale of my property I also took a personal distribution on the sale of the property.

Do I put the personal distrubution into the Schedule E under the sale of the house, and then put the 1031 seperately as the like and kind? 

Or, how would I go about this? 

0 9 563
9 Replies
Level 15
Oct 25, 2022 9:19:31 AM

I spent 100% of the funds on a like and kind so that should be no problem.

Unfortunately I also took a personal distribution on the sale of the property.

 

if all the funds were used to buy the replacement property where did the funds come from for the funds you took out?

 

Level 3
Oct 25, 2022 10:04:30 AM

Sorry @Mike9241 I edited my question to make more sense.

I used 100% of the exchange on a like and kind.

However I took a personal distribution as well.  

Since I touched the money, where do I put the personal distribution funds from the sale of the property in turbo tax? 

Level 15
Oct 25, 2022 5:31:30 PM

we can not see the closing document from the exchange trustee. so your statements are contradictory

 

if you used 100% of the proceeds from the sale of the old property to buy the replacement property then there should be no funds left for distribution to you.  so you need to explain in detail how you got money out of the exchange.  

 

however, it is possible you gave the exchange trustee additional money in case it was needed to purchase the replacement property. you properly completed the exchange, totally tax-free (no boot - no non-like-kind property involved, no mortgage reduction old property vs new property)  and the trustee return the extra cash 

 

another possibility is you got the cash from the sale and then turned around and used the funds to buy the replacement property. this would not qualify for 1031.

 

Level 3
Oct 26, 2022 5:29:35 PM

the ladder is true.

 

i took cash out because i needed it for emergency 

 

so i am aware that is is not 1031

 

so where do i put that portition of "personal distribution"" in turbo tax?

 

i'm guessing i put just that SMALL PORTION into the schedule E as a sale ? 

Level 15
Oct 26, 2022 9:24:54 PM

if you got hold of all cash from the sale of the old property and used whatever for personal purposes you do not have a qualified 1031 exchange. the entire transaction is taxable. you report the sale of the old property through whatever schedule E in Turbotax form you reported the rental. if sold at a gain you will owe taxes on depreciation recapture and if your gain exceeds depreciation allowed or allowable the balance would be capital gain.  you bought a new property which evidently is also a rental that needs to be entered in TurboTax on a new schedule E/rental.   If you don't understand how to record the sale of the old and the purchase of the new properties, then you should consult with a tax pro to make sure things are reported correctly. 

Level 3
Oct 27, 2022 7:51:04 AM

@Mike9241 please re-read my posts.

 

I did not get a hold of "ALL CASH" 

 

I took a SMALL PERSONAL AMOUNT OUT OF THE 1031. 

 

where do I put that small personal amount of money that I touched in turbo tax? 

 

 

Level 15
Oct 27, 2022 8:25:00 AM

line 15 of form 8824

Level 3
Oct 27, 2022 9:22:00 AM

Thanks @Mike9241 ! 

 

So, I will place it on line 15.


And, I'm assuming this piece is fully taxable event? 

Level 15
Oct 27, 2022 10:42:54 AM

yes boot is fully taxable to the extent of gain and section 1250 recapture come before capital gain