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Level 2
posted Apr 11, 2025 3:09:42 PM

Hi, i have reverse exchange 1031, i swapped a condo. for some reason, desktop software is showing loss even though it is not. i believe it has a problem understanding

i have reverse exchange 1031, i swapped a condo. for some reason, desktop software is showing loss even though it is not. i believe it has a problem understanding straight exchange vs reverse.

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3 Replies
Level 2
Apr 12, 2025 11:54:21 AM

sorry i could not authenticate into forum to finish rest of question.

i am uploading 3 screenshots, smart worksheet, part 1, part 3

I want to make sure Turboxtax is calculating correctly.

in my reverse exchange basically, i bought a condo at 205k, sold old one at 332500; no mortgage given or received, there is roughly 28716; no depreciation was taken (it was my dad's with my name).

i would think i have to pay taxes

Level 2
Apr 13, 2025 7:50:26 AM

hoping to get some guidance before 15th 😓

Expert Alumni
Apr 16, 2025 11:54:32 AM

Not seeing an issue here.  Your screenshots show that you exchanged a property worth more for a property worth less.  The loss was calculated into the basis for the new property.  

 

You're not paying taxes on any gains (in your case it was a loss), until the 'new property' is sold, as gain is deferred in a 1031 exchange.  Your loss is taken by reducing the Cost Basis of the new property. 

 

Here's more info on How to Enter a Like-Kind Exchange and 1031 Exchanges.

 

 

@kjpkjp28