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Using the Like-Kind Exchange Wizard in Lacerte
by Intuit• Updated 1 month ago
The easiest and most efficient way to enter a section 1031 like-kind exchange is by using the Like-Kind Exchange Wizard on the Depreciation screen. You can only do this in interactive mode. This feature isn't available in batch mode.
Follow these steps to enter a like-kind exchange using the Like-Kind Exchange Wizard:
- Go to the Depreciation screen:
- Screen 22 (Individual)
- Screen 14 (Partnership)
- Screen 21 (Corporate)
- Screen 16 (S Corporate)
- Screen 27 (Fiduciary)
- Select the Asset being exchanged from the left navigation panel.
- Scroll down to the Like-Kind Exchange (8824) section.
- Click on Like-Kind Exchange Wizard button.
- Click Next on the introduction window.
- Enter the Date the property transferred to other party.
- Select the asset(s) being exchanged from the Available Properties section.
- If the asset is already listed under the Properties being exchanged section skip to step 9.
- Click the > symbol between the two properties windows to move the asset to the Properties being exchanged window.
- Click Next.
- Enter the information for the property received:
- Description of property
- Date property found for exchange
- Date property received for exchange
- FMV of like-kind property
- FMV of other assets (not like-kind) (if applicable)
- Click Next.
- Complete all applicable information on the Cash and Loan Amounts window:
- Cash Given by Taxpayer
- Cash Received by Taxpayer
- Don't enter a value for both Cash Given by Taxpayer and Cash Received by Taxpayer. Enter the net value as either given or received.
- New loan received (Assumed by taxpayer)
- Old loan given up (Assumed by other party)
- Expenses of sale
- Click Next.
- Complete all applicable information on the Data About Other Property Given Up window (if there are other properties given up that aren't like-kind properties):
- FMV of other property (non-cash)
- Adjusted basis of other property
- State basis of other property (if different)
- Click Next.
- Mark the checkbox labeled Simplified Method - Elect to not create carryover basis assets Reg. 1.168(i)-6(i), if applicable.
- If this box is checked, one asset will be created for the full basis of the property received (Form 8824, line 25).
- If this box isn't checked, a separate carryover basis asset will be created for each asset given up on the depreciation screen, a new asset will be created on the depreciation schedule for an incremental investment (Boot); and the adjusted basis of all these assets sums to the full basis of the property received (Form 8824, line 25).
- Click Next.
- View the Like Kind Exchange Summary.
- Click Finish.
- Click Yes or No at the last window.
- If Yes, Lacerte will create a new asset with the new Description and new Cost/Basis of the Property Received.
- If No, you'll have to manually create a new asset.
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