Client sold arena and storage units (all business real property) on 12/31/19, purchased replacement property on 2/28/20. Issue is with calculations of the gain since the replacement property wasn't as much value as the sold property. All other 1031 requirements were met. I am either misunderstanding how the calculations work OR I've entered something incorrectly into the worksheets because I believe the gain is being calculated too high. Any help is appreciated; amounts to follow below.

Sold property value: $1,089,906

Received property value: $284,600

Basis of Sold property: $669,352

Shouldn't taxpayer only have to pay capital gains on sold property value minus sold property basis minus received property value? System is currently calculating capital gains on sold property value minus basis. Thinking I might have mucked something up in keying in the amounts. Also, total amount of gain would qualify as 1250 property since everything sold was real estate...right?? 😞

Thanks all!