On 8824 form (like-kind exch), General Information Smart Worksheet, it askes to "Double-click to link a copy of Schedule C,E,F...", What property should I link to? The one disposed or the one received?

[Mona Song]

My client sold a rental house exchanged to a rental condo last year that was identified as 1031 like kind exchange activity.

The house costs 105900 and was sold for 252,500, they paid off mortgage of 119,700 with 426 closing expense: the depreciation allowable/allowed is 28978. The new property costs 400,000, the expense associated is 6859.

How to calculate the adjust basis of the property given up? Is mortgage paid off counted to reduce the gain realized (not recognized since it is 1031 exchange)?

There is accumulated passive carryover loss of 55,122 on the disposal property, how to input this loss that can be used to reduce their rental income from the property received on in the future in ProSeries? 

Would it be more beneficial to my client to NOT using 1031 exchange since they could claim this 55,122 Passive Loss when disposing of the property? If yes, which form should be used to input this number?

Last, On 8824 form (like-kind exch), General Information Smart Worksheet, it askes to "Double-click to link a copy of Schedule C,E,F...", What property should I link to? The one disposed or the one received?

Thank you so much for helping! This really stresses me out 😞

Mona

[sjrcpa]

How to calculate the adjust basis of the property given up? Is mortgage paid off counted to reduce the gain realized (not recognized since it is 1031 exchange)?

Cost + Improvements less Accumulated Depreciation = Adjusted Basis.

Mortgage payoff does not affect realized gain.

1031 is mandatory if you meet all the requirements.