Client is selling farm to Joe Brown. Client is buying another farm from Fred Smith. We want to do a like/kind exchange. Farms both include buildings, home, and acreage. Client has not lived at his place 1 year, so as I read, the home would not fall into the safe harbor. Wasn't sure about the home, anyway. Money will go to qualif interm. and sales will be close together in days. On the 1031, the only like kind will be acres and buildings, correct? Sale of home will be reported on Sch D. Can the fences on the new farm be sect 179? What about any extra new buildings on new farm. I'm not sure how the deprec will be set up. Are there any good resources on this subject? So much I read talks about it, but not exactly how to set up and what forms.
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Since I posted, I have had two more calls about like/kind exchange. What's going on? I guess everyone wants to upgrade with no taxes. Can't blame them. Please, does anyone have a good resource for this? The title co here says they can be the QI, but taxpayer needs to talk to taxpro. How do you set up the contract? If there is a home, which qualifies for exemption, do you leave that money out, or the home out of the contract for like kind only? One question leads to the next. Appreciate any help. -
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They've done a good job for a few of my clients who have 1031 exchanges.Comment
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I have my QT, and the exchange is no problem. We identify the property and probably close within a couple of days. I'm needing info on how the deferred depreciation is carried forward. First farm has more buildings and more deprec than the buildings we are exchanging for. I'm assuming that the new buildings will have no dollar value and the excess deprec that we are carrying over just kind of sits out there and waits to be recaptured when that farm is sold or exchanged again? This is the kind of resource info I'm looking for. Any help?Comment
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I have a wealth of info on this at the office. Will review and send you cites as soon as I can get there. Personal home does not qualify for like/kind exdchange. Farm/land/bldgs will.Comment
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The excess depreciation is recognized in the year in the exchange.Comment
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