Need to declare a 1033 election (involuntary conversion property) owned by LLC, in which I took Section 179. Can I make a 1033 election statement with TT Home/Business?
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Need to declare a 1033 election (involuntary conversion property) owned by LLC, in which I took Section 179. Can I make a 1033 election statement with TT Home/Business?

 
4 Replies
Intuit Alumni

Need to declare a 1033 election (involuntary conversion property) owned by LLC, in which I took Section 179. Can I make a 1033 election statement with TT Home/Business?

Yes, you can do it from  Forms Mode.  Go to Forms, and click on Open Form, and type in election to defer, see attached.   Choose the Election to Defer Gain Invol Conversion form and click on Open Form.   

Here is the full text of Publication 544, Sales and Other Dispositions of Assets.  https://www.irs.gov/pub/irs-pdf/p544.pdf 
Level 3

Need to declare a 1033 election (involuntary conversion property) owned by LLC, in which I took Section 179. Can I make a 1033 election statement with TT Home/Business?

Where in the step by step or forms do I enter the reduction in the basis of the new replacement property due to the deferral of the gain on the involuntary conversion property?

Expert Alumni

Need to declare a 1033 election (involuntary conversion property) owned by LLC, in which I took Section 179. Can I make a 1033 election statement with TT Home/Business?

You don't have to enter the reduction of the basis of the new replacement property anywhere. Just enter your new basis on the return where you first depreciate the property.

 

Your basis in the replacement property is reduced by the gain postponed.  You calculate the gain realized on the involuntary conversion using the IRC Section 1033(a)(2)(A) worksheet in TurboTax desktop Forms mode.  (Or you can use IRS Publication 544). Then you subtract that from the cost of the replacement property to get your new basis.   

 

@toddrub46

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Returning Member

Need to declare a 1033 election (involuntary conversion property) owned by LLC, in which I took Section 179. Can I make a 1033 election statement with TT Home/Business?

I think there's a calculation error on the Form 1033- Election to Defer Gain on Involuntary Conversion.

The computation of Realized gain doesn't use the cost of the replacement property, it uses the adjusted basis of the converted property.  In my opinion, the formulas don't allow gain to be deferred at all.

Three rounds of TurboTax help, and they finally say this computation is too complex for TurboTax and that I need to go to a CPA.   

If anyone else has better/different luck, I'm all ears.

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