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1031 exchange with no boot

How do I report a 1031 exchange without boot?  I have the whole process with form 8824 completed but it seems like I can not dispose of the asset without triggering an entry on form 4797.  If I report a 'sale', which seems to be the only way I can get a truncated year in terms of depreciation on the rental property, the system will generate a gain based on the sales price.  If I don't report a sale, form 4797 still populates but instead with a loss in the amount of my net basis on the relinquished property.


I figured there would be an easy solution, such as deleting form 4797, however, the system will not even allow me to do this.  


To me, it seems like this is a software glitch but was not able to get any guidance from technical support so figured someone here might be able to help.  

3 Replies

1031 exchange with no boot

See https://ttlc.intuit.com/turbotax-support/en-us/help-article/import-export-data-files/enter-like-kind...


Note that, depending upon the choice you have made with respect to the relinquished property, you will have to continue depreciating that property or convert it to personal use in the program (the latter in order to remove it from business use and stop depreciation).

1031 exchange with no boot

In my opinion Turbotax does a lousy job of handling 1031 exchanges.  under 1031 and the related depreciation rules. option one: continue depreciating the old property based on the remining depreciable basis over the remaining depreciable life (example depreciable basis left (cost - land - prior depreciation say 185000 over remaining depreciable life say 18.5 years meaning you have taken 9 years of depreciation (residential real estate) on the property thus depreciation for each full year should be the same as in the past.    option two: treat all the capital costs as new property segregate the land cost and start depreciation anew. depreciation starts on the later of the date the replacement property was acquired or the date the old property was given up.  a statement "election made under section 1.168(i)-6(l)' for each property must be attached to your return.


to use option 2 enter the date as described above to stop depreciation on the old property.  no sales numbers that's why you're getting the 4797. the sales amounts are only entered on the 8824.

Turbotax does nothing in regard to telling you about this option and how to enter the info in its app. setting up the replacement property is up to you. Turbotax does not do it automatically at least not in Desktop Deluxe. 


and you must link the 8824 to that specific rental propety . 


1031 exchange with no boot

@Mike9241 wrote:

and you must link the 8824 to that specific rental propety . 

.....and even that does not seem to work properly (at least it did not in my tests).

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