1031 exchange

[99mtamchamp]

Have a question about 1031 exchange.  I haven't seen a lot of these in 35 years (maybe 2 or 3 and non since using Proconnect).  I have a single member LLC client who is a Veterinarian.  He sold his practice and his building as separate transactions. He did all of this pretty much on his own.. as far as going through1031exchange company.  The basics sale of the building was 565k with 60k down.  The rest is a note that is interest only with the balance of the principle will be paid in 2022.  The purchase price of the 1031 exchange property is a total of 255k. I'm looking for some suggestions on properly inputting in Proconnect. Also, if anyone could let me know what the end result of this would be (Gain...deferred gain).  cost of the sold property is 219k with 206k accumulation. depreciation. Any advice would be greatly appreciated. Thanks

[qbteachmt]

Let's review what "1031" provides. By deferring the Proceeds not being made available to the taxpayer, the reinvestment shelters the Gain.

So: "He did all of this pretty much on his own.. as far as going through1031exchange company."

What does that mean?

"was 565k with 60k down"

Who got that money?

"with the balance of the principle will be paid in 2022"

In time for it to meet the timeliness for the exchange rules?

"The purchase price of the 1031 exchange property is a total of 255k"

So, clearly, this is at most a Partial Exchange. And, a partial Installment sale. And, partially gain that most likely is very taxable.

And if none of that was done with a qualified 1031 intermediary, then all you have is someone calling their Dog a Duck, for convenience.

[99mtamchamp]

He did have a qualified intermediary...I just meant he did it on his own is i am just finding out about it after the fact.  My client got the 60k down last year and interest only payments through the end of the year (the closing was in July).  He is scheduled to get the balance within in the next couple months.  It met all the time constraints.  My main question is: based on the facts what approx is the taxable gain? What is the basis for the new exchanged asset.  I'm having a tough time getting this to report on Proconnect software so I'd like to know if my results are accurate

[qbteachmt]

"My client got the 60k down last year"

Again: a 1031 exchange means he would not get the money; the Intermediary gets the money. Think of it as an Escrow process. It's not sheltered or deferred if the taxpayer touches it.

"It met all the time constraints."

The various events also matter.

"My main question is: based on the facts what approx is the taxable gain?"

You need to use some resources that help explain this for the various parts, such as:

https://www.investopedia.com/financial-edge/0110/10-things-to-know-about-1031-exchanges.aspx

"What is the basis for the new exchanged asset. I'm having a tough time getting this to report on Proconnect software so I'd like to know if my results are accurate"

You might have a partial exchange and boot; or, once you work through the details, it might be a failed exchange. The intermediary should be able to help by providing paperwork that clarifies some of this. No one on the internet can work through all these details.