Client completed a 1031 exchange. Rented out the property for a year and then converted to personal use. They held the property for a total of 5 years.

My understanding is that their $250,000 exclusion needs to be prorated for the non-personal use of the property. Lacerte does not seem to be able to do that and as soon as you check the box that it was acquired in a 1031 exchange, all of the exclusion is disallowed.

Lacerte Support says to just override. I would love to know if someone has figured out how to get the software to calculate the allocated amount.