1031 Exchange Detail

Forum|Forum|5 years ago
November 18, 2020
5 replies
29 views

I have filed returns before with1031 exchanges. This is the first with Proseries. Stuck on one entry on Form 8824. Specifically, on the Summary Smart Worksheet, Item L, "Cash Received". Is this

1. The amount realized from the sale of the relinquised property?

or

2. Cash received in addition to the FMV of the replacement property? In this case, the taxpayer just received the replacement property with no debt assumed so the value on Item L would be $0.

ProSeries Basic

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IRonMaN

Level 15

Cash received is cash received. If there was a pure exchange of property, there would be no cash received. Cash = gain recognized.

Slava Ukraini!

B

bevantaxservicesAuthor

Level 4

Yes, you are correct. This is going to be a partial 1031 exchange because the replacement property is about $15K less in market value. Not sure where to start in ProSeries. Tips?

George4Tacks

Level 15

Do a search for "1031 worksheet" and either download an excel spreadsheet or use an online calculator to get all the numbers in line BEFORE trying to get the software to work.
https://proconnect.intuit.com/community/individual/help/1040-completing-a-like-kind-exchange-of-business-property-1031/00/5827 may help

Answers are easy. Questions are hard!

P

Pammer

Level 3

Cash received would be cash received on the sale - includes property taxes and interest as these items are not part of the 1031 exchange. It would also include cash received on the purchase of replacement property (property taxes, loan fees paid out). Any cash out is taxable on line 15 of form 8824 and flows to form 4797.

If the property taxes credited on your replacement property are larger than other expenses paid through the HUD-1, it is not supposed to net the cash received...this is where I get stuck.

Also, if the old mortgage pay-off is larger than your new mortgage, the difference is taxable. You cannot pay $$ to reduce the difference on either of your HUD-1's.

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