Aug

28

How is a 1031 exchange of residential property accted & reported to the IRS? sale, deprec., and improvements?

Filed Under Home :: Real Estate 

jrt asked:


The original property was sold at a gain, but I was advised that all proceeds had to be rolled iinto the exchange-what happens to gain, basis, improvements etc.?

Tiffany
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    • Comments

    One Response to “How is a 1031 exchange of residential property accted & reported to the IRS? sale, deprec., and improvements?”

    1. WealthBuilder on August 31st, 2010 4:28 am

      Yep. it’s reported with your 1040 on Form 8824.

      Keep all your records for when you make each disposition of the properties.

      WealthBuilder
      Enrolled Agent / Tax Specialist

    2. spicertax on September 3rd, 2010 3:24 pm

      Use Form 8824 for the exchange. The gain on the old property will decrease the basis of the new property. When computing the gain on the old property be sure to decrease the purchase price by depreciation allowed to date of sale.

    3. jseah114 on September 5th, 2010 9:50 am

      In a like kind exchange, no gain is currently recognized and your basis in the original property will roll over to the new property you received in exchange. However, if you received something else in addition to the new property (i.e. you gave up the house, but in return you received the new house AND cash), you will need to recognize gain to the extent of the “boot” (the asset received).