I have a client that sold their 1031 replacement property and there is about $100k in deferred gains from that sale that occurred nearly 20 years ago. In Lacerte, would I just reduce the basis by the deferred gains when I enter the sale on the disposition screen? 

Also, California is involved. The land that was initially sold was in California while the replacement property that has now sold is in Virginia. Any input regarding that would be much appreciated considering I rarely prepare California returns. Thank you!