"Form 8824 is prepared and filed in the same tax reportin...

mike9 · ‎12-07-2019

Client sold relinquished property October 2018 and the replacement property March 2019 within the 18o and 45 day windows.

How will I report this in pro series. One answer I got from a practitioner was to use the Installment sales but this may trigger recapture gains.

Second question if I may, the client sold and bought like kind Hotel which includes Furniture and equipment . Does such personal property also qualify as a 1031 exchange.

Thanks so much for your help

Mike

abctax55 · ‎12-07-2019

Report the beginning of the § 1031 on the 2018 return ('cuz you have to stop the depreciation). Zero out/suppress the realized gain - I'm sure HOW in PS as I use Lacerte.

Personal property doesn't qualify for § 1031 treatment effective 1.1.2018 per TCJA of 2017. So you'll need to allocate the sales price and report the gain related to those assets on the 2018 return.

Determine that allocation of the sales price could be a lot of fun....were those assets listed separately on the deprec. schedule?

HumanKind... Be Both

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TaxGuyBill · ‎12-07-2019

Does the 8824 go on the 2019 tax return? Or the 2018 tax return?

abctax55 · ‎12-07-2019

I don't remember, Bill. It's been ages since I had one that overlapped.

But I think you do complete it for 2018. Because the 2018 return better not be filed before the back-end of the § 1031 has been completed !

HumanKind... Be Both

mike9 · ‎12-07-2019

Thanks to the both of you. I was thinking of overriding the gain as well. So I will carry the deferred gain on the Balance Sheet and report it on 8824 in 2019.

mike9 · ‎12-07-2019

Wait I am confused. How can you complete 8824 in 2018...I get an error if I put in any dates other than 2018

abctax55 · ‎12-07-2019

"Form 8824 is prepared and filed in the same tax reporting year in which the relinquished property was transferred/sold."
From the instructions for F 8824.

@mike - I don't think you *have* to add the new assets with the 2019 date. AND, you may be able to override the error (again, I use Lacerte).

HumanKind... Be Both

George4Tacks · ‎12-07-2019

The exchange is reported on the 2018 return. https://accountants-community.intuit.com/search?utf8=%E2%9C%93&q=1031&button= for ProSeries

As stated you pick up the new depreciation in 2019.

You possibly need to include the 8594. Hotel and sale of a group of assets of a business? https://www.irs.gov/pub/irs-pdf/i8594.pdf

Answers are easy. Questions are hard!