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1031 Exchange Detail

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?


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.

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5 Comments 5
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!

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?

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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-busi... may help

Here's wishing you many Happy Returns

Thanks for the extra reference.  I am having a little trouble with Items P & Q on the Smart Worksheet.

P = "Ordinary income under recapture rules."  This would seem to be 1250 depreciation taken

Q = "....Unrecaptured Section 1250 gain". It looks like it's the same as P and instructions are a little hard to understand.

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Level 2

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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