1031 Exchange for Rental Property: end-to-end question

[randoodle]

@Ira2023 ,

The like-kind exchange itself should not cause any gain to be reported.  It simply generates Form 8824.  It gives you the deferred gain as well as the cost basis of your new property.

With respect to the new property, use the cost basis from the Form 8824.

With respect to the old property, do not report that you sold it!  You exchanged it.  If you report that you sold it, you will incur that gain.  Simply take all of the old assets off the market on the date you disposed of the old property.

[tmeow]

Hi @randoodle , this is SUCH a helpful post!  I followed it step-by-step but got stuck at a subsequent step.  After I answered "Yes" to "Did you stop using this asset in 2022?", I was presented with a Sales Information screen.  Nowhere in the process did I mark that this property was sold (per your detailed instructions, which I followed to a T).  What should we enter in this screen?  It's asking for Asset Sales Price (Business Portion Only), Asset Sales Expenses (Business Portion Only), Land Sales Price (Business Portion Only) and Land Sales Expenses (Business Portion Only).  I entered 0 for all of these which I believe is correct.  However, if I continue clicking through the menu I get to a screen called "Loss on This Asset's Land".  Based on our calculations, you have a loss of $xxx,xxx on your disposition of the land for [this asset].  We'll automatically transfer this loss to the correct IRS forms for you.  Obviously, there is no way this is correct but I don't know how to fix it!  I did not suffer a loss of the full value of the asset's land in this exchange.  Please help!

[selma_ea]

you arre in the wrong section.  This is not business income.  Rentals are their own thing and not a business, altho you may think of it as such.  It goes to the Schedule E stuff, not C.

[Gary221]

Hello Amy, thank you for the simple yet very information about calculating cost basis for acquired properties. I am currently using the online taxpro premier version and do not have option to add second acquired property in single exchange. Do I need to download the desktop version and complete worksheet? Or is there another way with online version?

Also, I sold one of the acquired properties within a year of the exchange (at a loss). Is there a way to link this property to the above exchange in turbotax? If so, I would greatly appreciate information on how to do this.

Lastly, I'm absolutely fine with purchasing the desktop version if need be. 

Thanks once again!

-Gary