1031 Exchange

[taxxcpa]

1031 Exchange:
My understanding of the 1031 exchange process is illustrated in the example below. Is there anything that is misstated or incorrect?
Day 1: Sell rent house with funds going to a qualified intermediary. The house cost $ 100,000 and is fully depreciated so the basis for gain/loss is zero.
Day 45: Identify the Replacement property ( new rent house) which will cost of $ 200,000. Complete the “identification of Replacement Property” and give it to the qualified intermediary. NOTE: this can be done before the 45th day if the replacement property is identified earlier.
Day 180: This is the deadline. The replacement property must be acquired by the 180th day.
There will be a deferred gain of $ 100,000 on the old house.
The new house will have a depreciation basis of $ 100,000 ($200,000 minus the deferred gain). NOTE: The $ 100,000 basis assumes NO value for the land. If the land was worth $25,000 then the depreciable value would be reduced to $ 75,000.

[Davc]

1031 Exchange:
My understanding of the 1031 exchange process is illustrated in the example below. Is there anything that is misstated or incorrect?
Day 1: Sell rent house with funds going to a qualified intermediary. The house cost $ 100,000 and is fully depreciated so the basis for gain/loss is zero.
Day 45: Identify the Replacement property ( new rent house) which will cost of $ 200,000. Complete the “identification of Replacement Property” and give it to the qualified intermediary. NOTE: this can be done before the 45th day if the replacement property is identified earlier.
Day 180: This is the deadline. The replacement property must be acquired by the 180th day.
There will be a deferred gain of $ 100,000 on the old house.
The new house will have a depreciation basis of $ 100,000 ($200,000 minus the deferred gain). NOTE: The $ 100,000 basis assumes NO value for the land. If the land was worth $25,000 then the depreciable value would be reduced to $ 75,000.

Day 1: transfer property to QI who sells it and holds onto the funds. You neglected to say what the selling price was so we don't know the realized gain, deferred gain, or the basis of the replacement property.

[taxxcpa]

Additional information

Day 1: transfer property to QI who sells it and holds onto the funds. You neglected to say what the selling price was so we don't know the realized gain, deferred gain, or the basis of the replacement property.

Thanks, let's assume the property was sold for $ 100,000, the same as its cost and the $ 100,000 plus a mortgage for l$ 100,000 is the cost of the new property which would give the new property a basis of $ 200,000 minus the deferred gain of $ 100,000;i.e. a net depreciable basis of $ 100,000 (ignoring land).

[Davc]

Then with the exception as noted for Day 1, you've got the basics of the most common type of 1031 transaction involving RE.