What is Adjusted basis of like-kind property given up, line O? What am I supposed to enter in the box titled, Regular Tax?

[AmandaR1]

The adjusted basis of like-kind property given up, begins with what you paid for the property (your cost). You can then add to the cost basis any additional amounts to get the property ready for your intended use. For example, with real estate, if you purchased a home and then remodeled it, this cost would increase the basis. 

If you've used the asset as a rental property or for business then you've taken depreciation expenses over the years, then these amounts reduce the basis (and are subtracted from the cost). The result is the adjusted basis. 

The software calculates the tax amount for you. Otherwise, let me know what screen you are seeing this requested on. 

[Srubiotax]

Hi there, thank you for the explanation. Now it’s asking for AMT 

[MarilynG1]

@Srubiotax TurboTax will calculate the Regular Tax for you on a Like-Kind Exchange.  The AMT Tax is usually the same amount as Regular Tax, if you are not subject to AMT. 

Click this link for more info on Like-Kind Exchanges.

[lkng67]

I have a like kind exchange 1031. It was completed by an Intermediary and I understand the rules of the 1031 exchange. You have two areas on the like king section. Am I corrected that I take the original price, add my improvements and take off all of the amounts of deprection since it became a rental here? 

I understand everything else, but then, in the form the word (taxes) is above this basis amount. I don't have to pay taxes since I did a 1031 full exchange.

Then I move forward and it asks for AMT adjusted basis What am I supposed to enter here?

[AmyC]

1. Maybe. When you say improvements added to the basis, that depends on when you did the improvements.

• If you did improvements before renting, they were already added to the basis for depreciation.
• If you did improvements while renting, they were added into assets and being depreciated.
• If you did improvements after renting, then they would be added to your basis.

Generally, for example:

• Buy building A, original cost $250,000, depreciated $150,000, sold $400,000
• if sold, A would have gain of $300,000 but instead did a 1031 exchange.
• Buy building B for $500,000.
• Cost basis for new property B is $500,000 -  prop A gain $300,000 = $200,000

2. No taxes on a qualified 1031 exchange.

3. It depends:

• If you have not been subject to AMT tax, it will be the same depreciation amount. 
• If you have been subject to AMT tax, locate your Forms 6251 from prior returns and add up the allowed amounts of depreciation.