A 1031 Exchange question?

[ejbpike]

I did a 1031 Exchange in 2017 and in Turbo Tax Premier there is only one line entry allowed for the exchanged/relinquished property.  In my case I exchanged two properties and purchased one replacement property, so how do I enter the two exchanged properties in Turbo Tax?  Do I just combine them into one line item?

I have posted this question twice and have never received any responses? What other recourse do I have to get this answered by Turbo Tax?

[Anita01 · Accepted solution]

Yes, you have to combine the information for both properties and make one entry.

[v54]

What if its the other way around? I sold 1 and bought 3. How do I enter it into TurboTax?

After I enter in the new property and then put in that I acquired it through a like kind exchange --> Turbo Tax asks for Last year's depreciation schedule of the property I gave up, the basis of new property and Like-kind exchange tax forms.

How do I handle it if I sold 1 property and then bought 3? The 3 cost slightly more so I added some cash at closing.

[comptonn2468]

Yes, this is my question too. I sold o and bought 6 in another state. Need to enter the 6 to show I used all of the money from selling.

[Anita01]

On the 8824 or on the interview, you just add together your numbers for all the properties on each side of the exchange.

[pmPMpm]

I have the same 2017 1-to-three like kind exchange. Seems like TurboTaxAnita is oversimplifying the situation. I think we need to enter each new property separately in TT, rigtht?  Does anyone know which line or worksheet item shows the cost basis to input into the TT step-by-step questionaire?

[pmPMpm]

To further clarify my prior comment, which line or worksheet item on my 2017 return shows cost basis....

[Wonderer]

I don't see a reply to pmPMpm's question above.

Anita01 states to combine any multiple properties on the relinquished/replacement sides and entered as a single entry in Turbotax step-by-step screens. This will carry to foam 8824.

Is the correct answer to pmPMpm's question that he needs to add each of the multiple properties he acquired as replacement properties as a new rental property and allocate one-third of the basis to each?

How would he handle the relinquished property that is already in the system?

Gary

[lasbanas1]

Tax software for the general public is not capable of dealing with multiple property exchanges and that requires pro software and prep. Multiple replacement properties are entered separately so depreciation/expenses/income line up. Property given up is entered as usual but with the fmv of the properties received combined.

[Rao Puvvula]

I sold my rental property and purchased another property of higher value under 1031 Tax Deferred Exchange. I had received a From 1099-S from the Escrow company. Do I need to file any paper work to IRS?

[ThomasM125]

You are not required to report the form 1099-S if you did not have a taxable gain on the disposition of the property.

[BAeckroth]

If this is the case we have to get a PTIN number to buy your Pro system, rediculous

[laa5679]

So it sounds like TurboTax can't do multiple property exchanges ( I sold 3 properties and exchanged them to 6 properties, can't figure out hoe to best report them on TurboTax Premier).  Is it time to give up TurobTax and hire a CPA tax preparer?

[MarilynG]

Possibly.  For the purposes of reporting the exchange on Form 8824, you could combine totals for multiple properties given/received.

When you set up each of the new rental properties, however, you need to calculate the Deferred Cost Basis of each separately and enter each of them separately.  This is the hard part, especially if cash/loans are involved separately for the properties, and in your case, several properties to deal with. 

Once you have the fair market value of each property you can divide the value of each property by the total to arrive at the percentage.  Then use that rate against the basis of the property you gave up (on the day you gave it up) and any extra cash you paid for the property or reduced by any cash out to arrive at the depreciable basis for each property. Keep in mind that the depreciable basis does NOT change. It transfers to the property or properties you received and continues on like you always owned the property received.

Click this link for more discussion on 1031 Exchange of Multiple Properties.

@laa5679

[darmendarez]

I sold one and bought two, and I'm using TT online. I set up the two new properties in Rents/Royalties, but once I get through the 1031 interview it won't allow me to link to both properties in R/R. I'm seeing TT won't support that. I assume I need to link them for TT to generate basis/depreciation correctly?

Both new properties are identical (purchase date/seller/...) in every way...can I simplify this issue by combining them in R/R, as though they were one property? Is there any legal reason I can't do this to solve TT inability to support the 1 for 2 issues? I know if I separate them later it will be more of a hassle, but I need to end this TT nightmare.