Client followed all the rules and exchanged a condo for a rental home in 2014. There were no mortgages involved. Here are the numbers (rounded):
Adjusted basis in exchanged property: $20k
Settlement costs $15k
Purchase price of acquired property $200k
Boot received $30k
I have 3 tentative numbers; am I on the right track with each?
#1: Gain realized is $200k (purchase price) - 20k(adjusted basis of exchanged prop) + $30k (boot received) - $15k (settlement costs) = $195k.
#2: Recognized gain: $30k (boot)-$15k (settlement costs) = $15k
#3: Basis of Acquired property: $20k (basis of exchanged property)
Am I doing something wrong with the settlement costs? This is the first 1031 exchange I have dealt with and feel uneasy about it. Thanks for any help anyone has time to give!
Adjusted basis in exchanged property: $20k
Settlement costs $15k
Purchase price of acquired property $200k
Boot received $30k
I have 3 tentative numbers; am I on the right track with each?
#1: Gain realized is $200k (purchase price) - 20k(adjusted basis of exchanged prop) + $30k (boot received) - $15k (settlement costs) = $195k.
#2: Recognized gain: $30k (boot)-$15k (settlement costs) = $15k
#3: Basis of Acquired property: $20k (basis of exchanged property)
Am I doing something wrong with the settlement costs? This is the first 1031 exchange I have dealt with and feel uneasy about it. Thanks for any help anyone has time to give!
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