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jepson23
New Member

1031 exchange and "Sale of Business Property" calculation

Hello,

 

Last year, I used a 1031 Exchange to trade a rental property in Indiana for one in Tennessee. Using the instructions from this helpful discussion, I found the relevant fields to fill in, and I believe I filled them in properly. But a strange thing is happening.

 

In the "Like-Kind Exchanges" summary page, I'm seeing a recognized gain of $29,785 and a Deferred Gain of $54,320:

blurred.png

Yet for some reason, when I click "Done," I see a loss of nearly $120k in the "Sale of Business Property" section:

sale of business property.png

This exchange is the only thing I entered into that section, so I have no idea where this loss is coming from. It's changing my total income pretty significantly and resulting in a lovely tax refund that I really don't deserve. Any suggestions on how to fix this?

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2 Replies

1031 exchange and "Sale of Business Property" calculation

You are most likely going to have to provide more details on the transaction, such as the FMV or the relinquished and replacement properties, accumulated depreciation, whether boot was received, etc.

GeorgeM777
Expert Alumni

1031 exchange and "Sale of Business Property" calculation

It depends on whether there is something to fix.  The realized gain and the deferred gain are not causing the loss amount you see in the Sale of Business Property.   Sales of business property entered in other sections of the TurboTax interview will show up on the line that you see for Sales of Business Property.  Thus, it could be that some business loss has been reported elsewhere and that amount(s), when combined with your 1031 exchange information results in a total loss.   As an example of a loss that is reported elsewhere in TurboTax but would show up in the Sale of Business Property is any loss reported on a Schedule K-1.  

 

Let us know if you have reported losses elsewhere in your return as that information will help us to better understand your tax situation.

 

@jepson23 

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