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@acitrola wrote:

On form 8824, I assume I am only reporting the cash that was transferred and report nothing on the basis of the residence sold?  For this example, let's say there was  no gain.  

Second question, the two K-1's are reporting gains as if there was no 1031 or form 8824. 

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The 8824 will show the gain (realized gain), which requires the Basis of the sold property.  It will also calculate how much of that gain is deferred versus the amount of the taxable gain (recognized gain).

If there was no gain (realized gain), there would not have been any purpose in doing a 1031 exchange.  The purpose of a 1031 exchange is to defer the gain and only pay tax on the taxable/recognized gain (if any).

Only the taxable/recognized gain will show up on the K-1s.  The deferred/non-recognized gain does not show up on the K-1s.