1031 multiple relinquished properties for single purchase with boot and mortgage

[twil657]

I exchanged several rental properties (different purchasers but within time frame and through exchange agent) for one new rental property in a 1031, there is some boot and mortgages. Can the software do this? and if so, do i need premier ir business

[Critter-3]

Can the software do this ???   Yes but only if you use the Downloaded version AND  you know exactly what you are doing so you can make the override entries in the FORMS mode.  So if you don't know exactly what you need to do then either use a local tax pro  OR   upgrade to the online  CPA does it for you LIVE option. 

[twil657]

thanks, will the live cpa version cover helping with this? i am familiar with 1031 using prosystem in a former life but not purely overriding the forms - a live cpa other set of eyes may be helpful if checking the accuracy of form entries is something they cover 

[DianeW777]

TurboTax Live using TurboTax Premier Online will provide the help of a live Tax Expert to assist you with your return.  A like kind 1031 exchange can be completed using this software. As indicated by @Critter-3 you can use TurboTax CD/Download to complete this yourself.

• What is TurboTax Live?

An exchange of multiple properties or assets can be a tax-deferred like-kind exchange.  A 1031 exchange of multiple properties or assets occurs if there is one or more relinquished properties being sold and transferred and/or one or more like-kind replacement properties being identified and acquired.

Details: To compute excess gain to recognize in this type of 1031 exchange (multiple assets) follow the steps below.

1. The relinquished properties sold and the like-kind replacement properties acquired should be segregated or sorted into exchange groups.  The majority of 1031 exchanges involve only real estate, so only one group of assets would be involved. 
   • (1031 Exchanges of personal property will almost always involve multiple groups.)
2. The liabilities that you assumed as part of your 1031 exchange will be offset by the liabilities you were relieved of as part of the tax-deferred exchange, whether the liabilities are recourse or nonrecourse and whether they're secured by or otherwise related to specific property transferred or received as part of the exchange. 
   • If the amount of liabilities you assume exceeds the amount of liabilities that you were relieved of, the excess amount is allocated among the various exchange groups in proportion to the aggregate fair market value (FMV) of the properties that you received in the exchange groups. The amount allocated to an exchange group can't exceed the aggregate FMV of the properties received in the exchange group.
3. For each tax-deferred exchange group, an exchange group surplus or an exchange group deficiency, if any, must be determined.
4. The 1031 exchange rules and regulations are applied separately and individually to each 1031 exchange group to determine the amount of any excess gain to be recognized, and the basis of the like-kind replacement properties received.
   • § 1.1031 (k)-1(j) 1  This provides examples to determine the basis of each group of assets.

Once you have the fair market value of each property you can divide the value of each property by the total to arrive at the percentage.  Then use that rate against the basis of the property you gave up (on the day you gave it up) and any extra cash you paid for the property or reduced by any cash out to arrive at the depreciable basis for each property. Keep in mind that the depreciable basis does NOT change. It transfers to the property or properties you received and continues on like you always owned the property received.

• Where do I enter a like kind exchange (LKE) Form 8824?  
• When will federal forms be available? (Form 8824 will be ready on 3/31/2022, the IRS recently finalized the form)

I will assume this is for rental properties and provide some instruction for that process.

When you are signed into your TurboTax Account you can follow the steps below:

• Under Business Income scroll to 'Less Common Business Situations' > Start Sale of Business Property
• Check the box next to Any additional like-kind exchanges (section 1031) > Continue
• Follow each screen to make your entries > Your Form 8824 will be completed for you based on your entries
• See the images below for assistance