Can i use this software to report a sale and purchase of rental property with a 1031 exchange?

[MinhT]

Yes, TurboTax will handle the reporting of a 1031 exchange (like-kind exchange).

Please read this TurboTax FAQ on how to report a like-kind exchange:

https://ttlc.intuit.com/replies/5122176

[Nogales93]

I have not found the referenced document.  I am trying to report the sale of a rental obtained by a 1031 exchange and then sold 2 years later?

Thanks  Nogales93

[SweetieJean]

Where do I enter a like-kind or Section 1031 exchange (Form 8824)? (intuit.com)

[Critter-3]

Ok ... if you sold the original property 2 years ago then the 1031 exchange should have been handled on that return 2 years ago.  Now all you have to report is the sale of the rental  UNLESS  you are doing another 1031 exchange.  Simply indicate in the Sch E asset section that the assets were sold and follow the screen instructions to sell off all the assets in this rental. 

[kmccarty99]

I sold three rental properties and exchanged for one rental property, like-kind, through an exchange intermediary, following the 45 day rule, in fact all of the sale closings, and purchase closings were done within the same month.  Is TurboTax unable to accommodate one exchange involving multiple relinquished properties (3) into one replacement property?  It wants to generate a Form 8824 for each one separately.

[Critter-3]

Sorry ... but you would have to use the downloaded program using the FORMS mode with the infomation you have calculated yourself ... the program will not do any of this automatically.   So if you are not confident in how to do this  I highly recommend you seek local professional guidance or upgrade to the online LIVE option where the CPA does the return for you.

[tagteam]

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@kmccarty99 wrote:

It wants to generate a Form 8824 for each one separately.

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As @Critter-3 stated, you need a tax professional for this scenario.

In addition to the Form 8824 issue in TurboTax (and the necessity of Forms Mode), you need to attach a statement for a multi-asset exchange and will have to print and mail your return if you use TurboTax.

See https://www.irs.gov/instructions/i8824#en_US_2021_publink12597kd0e204

[Carl]

Multiple rentals for a single rental 1031 exchange can't be done with the online version of TurboTax. You would need to use the desktop version of the program so you can go into forms mode and manually enter data. I would forwarn you to be very, very careful though. While you can do this is forms mode, if you force any "overrides", then you will not be able to e-file. You'll have to print, sign and mail the return.

[tagteam]

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@Carl wrote:

.....you can go into forms mode and manually enter data. I would forwarn you to be very, very careful though. While you can do this is forms mode, if you force any "overrides", then you will not be able to e-file.

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Even if no overrides are entered in Forms Mode, e-file will not be available.

The return will have to be printed, signed, and mailed due to the requirement that a statement be attached to the return.

[Carl]

the requirement that a statement be attached to the return.

Forgot about that. So you're mailing the return any way you go.

[kmccarty99]

Ok, after much reading and all the comments, yes, I have figured out that I need to do a separate schedule to calculate the basis of each property separately and then do a "Summary" 8824 capturing the combined amounts against the new property acquired.

So, next question, in calculating the adjusted basis, it says I have to include ALL depreciation taken - does that mean depreciation taken for things purchased on the relinquished properties, like carpet, appliance replacements, furniture (two of them were furnished airbnb types), etc?  And what about the vehicle expenses/depreciation that I've allocated to each of those three relinquished properties?  I will continue to use that same vehicle for the new one.

Thanks to everyone for all the assistance - MUCH appreciated!!

[kmccarty99]

Oh, and yes, I do have the downloaded version with Forms, etc.

[Carl]

Yes, all depreciation on the property and all assets that were depreciated, must be accounted for.

[tagteam]

Except the vehicle was not part of the exchange so its basis does not change (nor was it sold) so there is no recognition or nonrecognition event for the vehicle.