Like-Kind Exchange

[Anonymous_]

You can try the thread at the following link, but TurboTax does not really support multi-asset exchanges.

https://ttlc.intuit.com/community/taxes/discussion/re-1031-exchange-for-rental-property-end-to-end-q...

In the Property Profile section, do not check the box indicating you sold the property (as you were instructed not to do). Instead, check the box in the Assets/Depreciation section (as shown in the screenshot below).

[hkim2007]

Hello @Anonymous_ 

Could you walk through how to do this on TurboTax Online version / TurboTax Premier?

I am trying to set the relinquished property to "item was sold, retired, stolen, destroyed, disposed of, converted to personal use, traded in, or given away (or it's not longer being used in business for some reason)" per your screenshot. 

Below is the the procedure that I am following from the online version:

-WAGES & INCOME

-Your 2021 Rentals & Royalties Summary

-Assets>Rental property>Edit

-Did You Stop Using This Asset in 2021? Select YES if sold, stolen, destroyed, converted to personal use, given away, taken out of service for any other reason [Hit Yes since trying to fix relinquished property in 1031 which is causing an incorrect large Passive Activity Loss in form 8582]

-Disposition Information: [Entered Date of Sale or Disposition & Date Acquired]

-Special Handling Required? You gave this asset away as a gift. [Hit YES}

-Depreciated Deduction Amount: Your amount for property is X. We'll transfer this amount to the correct form for you.

-Goes back to your Property Assets. DONE

After I've done all this it still shows (incorrect behavior) Passive Activity Loss of <262K> from the relinquished property.

How do you mark a rental property as the relinquished property in a 1031 exchange?  

[Anonymous_]

You might want to either contact Support (link below) or switch to the desktop version.

What is the TurboTax phone number? (intuit.com)

I am unable to provide any assistance because I do not use (and never have used) any online version of TurboTax.

However, you might want to start with entering "like kind exchange" in the search box.

[ag989898]

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@Anonymous_ wrote:

You can try the thread at the following link, but TurboTax does not really support multi-asset exchanges.

https://ttlc.intuit.com/community/taxes/discussion/re-1031-exchange-for-rental-property-end-to-end-q...

In the Property Profile section, do not check the box indicating you sold the property (as you were instructed not to do). Instead, check the box in the Assets/Depreciation section (as shown in the screenshot below).

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@Anonymous_I just wanted to say thank you so much!! I have been trying so many different things to make this work and of course it was really that simple! I have been doing my own taxes for years using TT and never had much problem. This year was the first year I did a 1031 exchange, selling one single family home for 2 new ones.

Of course as I entered in all my rentals the one I sold I marked it as such. Then found the like-kind exchange section and entered everything there. I have been trying for days to see how the 8824 and 4797 connect so the like kind amount would wash out the gain on the 4797.... now thanks to your comments I realize we either complete one or the other NOT both!

My biggest struggle now is how to properly enter the info when exchanging one rental for two. TT doesn't seem to like that so much. Fortunately since both of the new properties were more individually than the one I sold, I think I am just going to do a one for one when I fill out the like-kind exchange info. Unless there is a better suggestion?

For anyone else trying to do this, in the rental property profile this is the box NOT to check even though you did sell the property as part of a 1031 exchange:

Then under the assets/depreciation section of the same property you will say yes that you disposed of the property in 2021, its a yes/no question and enter the date of disposition.

Then go down to business items, sale of business property and the first screen after you click into that section will give you some check boxes. Select the one for like-kind exchanges (1031) and enter the info!

[Anonymous_]

if you do the assets section, make sure you do not enter figures for a sales price and basis. if you do, the program will calculate a gain or loss (which generates a 4797).

[ag989898]

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@Anonymous_ wrote:

if you do the assets section, make sure you do not enter figures for a sales price and basis. if you do, the program will calculate a gain or loss (which generates a 4797).

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Yes I had made that mistake too the first time I tried to "fix" my return... then realized this was causing the issue. Once I deleted those amounts the 4797 disappeared from my return. 🙂

I was so set to go out a hire a tax professional to help me!!

[eysl]

The first support agent could not tell me how the specific procedure to get to form 8824 to do the like-kind exchange. The second agent email me the specific instructions and it work. I have to start all  over again with those  instructions, because I could not get rid of the capital gain already got reported without the like-kind exchange.