I have a rental house with fair market price $100,000, but my adjusted depreciation value is 0. If I 1031 exchange with my tenant, she has a free and clear duplex ....

[casper]

i have a rental house with fair market price $100,000, but my adjusted depreciation value is 0. If I 1031 exchange with my tenant, she has a free and clear duplex with the same price. what will my adjusted depreciation value on duplex? 0 ? or $100,000- land value?

[TaxGuyBill · Accepted solution]

Your Basis in the new property would be your Basis in the Old Property ($15,000-ish based on your prior questions), plus any additional payments you make, minus any Exchange expenses you may have.

[casper]

I think you probably right, but i can not verified that. 1031 exchange rules did not say that.

[casper]

I find it.....................................it is $15,000 -land value
Sale of business property. You need to know   correct basis of the replacement property.

1. Relinquished Property Adjusted Basis

2. Plus: Any other Property Transferred

3. Plus: Liabilities Assumed by Taxpayer

4. Plus: Amount of Cash Paid by Taxpayer

5. Plus: Gain Recognized on other Property

6. Less: Money or Property Received

7. Less: Liabilities assumed by other Party

8. Less: Loss Recognized on other Property

9. Equals: Basis in Replacement Property

Treas. Reg. §1.1031(d)-1(e) says that the basis of the replacement property acquired must be increased (or decreased) by the amount of the gain (or loss) recognized on the transfer of the relinquished property.

You might want to gather all your records and seek the service of a qualified CPA to do your taxes.

[TaxGuyBill]

Assuming you do an 'even' trade and there are not costs, your Basis is $15,000-ish.  Your Depreciable Basis (the amount able to be depreciated) is your $15,000-ish minus the COST of land.

[casper]

yes, 🙂 I learn so much today, thx