In an earlier post's answer I was told that for the partial 1031 exchange, I fill out form 8824 and the information from that populates form 4797, specifically showing boot amount on L. 5. That has occurred correctly. It seems that Part 3, which details information re: gain from relinquished, sold property, should be filled out but the info from 8824 does not populate Part 3 of the 4797. It only shows the taxable boot amount on L. 5 of 4797, which is then shown in Schedule A as a taxable amount. So this is correct as is?
Secondly, because a partial 1031x has a taxable event (boot) the depreciation taken on the rental property sold should also be factored into gain for the purposes of figuring out the deferred tax that transfers to the replacement, purchased property. For that to occur, I adjust the cost basis, which reflects a larger gain on the sold property and thus a larger deferred amount. In addition, do I input that depreciation (27.5 straight line) on 8824 and/or 4797 so that it populates to the appropriate forms on turbotax? I see that Part 3 on 4797 specifically states if depreciation taken is a straight line 27.5 depreciation, then enter 0 in part 3. Thank you, mjd
