Which form to report replacement of condemned rental?

Forum|Forum|5 years ago
October 10, 2020
8 replies
54 views

We had a rental that was condemned in 2016. We purchased the replacement in 2019 and need to report this exchange in order to defer gain. The condemnation process took so long, that I did not file the election in 2016, but I did remove the condemned property from my schedule E and the depreciation schedule too. I need to know which form to use the 1033 exchange rules to tie the replacement property to the condemned one and pub 244 is greek to me. HELP!

Not A Product Question

CSeisertAuthor

Level 2

PUB 544, not 244. oops

Anonymous

it's not so much a form as it is an election. in search box type in invol.

election to defer gain invol conversion - should appear.

Carl

Level 11

I ma not at all familiar with 1031 exchanges, and especially not your specific situation of a forced conversion/exchange. But do be aware that if you will have a period of time (looks like several years to me) where the property is not "in service", then with the new property the depreciation will be severely skewed. If upon checking you find that is is "in fact" skewed and wrong, then you will not be able to use TurboTax to report this. The TurboTax program is not capable of dealing with a period of not being "in service" on a rental; especially if that period is more than one year.

Anonymous_

Level 15

@Carl11_2 wrote:

I ma not at all familiar with 1031 exchanges, and especially not your specific situation of a forced conversion/exchange.

It is not an 1031 (like-kind) exchange - it is an involuntary conversion (Section 1033).

See https://www.irs.gov/businesses/small-businesses-self-employed/involuntary-conversions-real-estate-tax-tips

Critter-3

Level 15

There are times/situations where a DIY program is not the right choice and is not up to the task. Since the involuntary conversion is such a rare situation if you could do this at all you would need the downloaded version most likely. Either upgrade to the LIVE version for one on one professional assistance OR seek local professional assistance asap.