Like Kind Exchange - Boot

[peggysioux]

On a LKE is the portion of boot (cash of $70,513) taxpayer received or the recognized gain amount added to basis?

I know that normally basis of new property consists of adjusted basis of old property plus exchange expenses plus difference between FMV of new property vs. old property; but was unsure how or if the "boot" portion came into play as far as basis for depreciation in future years. Any direction would be greatly appreciated!!

[jainen]

You are correct

>>normally basis of new property consists of.... "

You are correct about determining the new basis that way, but there is an alternate method you can use to check it. Take the FMV of the new property, minus the deferred gain. Boot received shows up inside the calculation of deferred gain.

[peggysioux]

Boot

So as long as I am depreciating the adjusted basis of the original basis (carryover basis of original property) plus add the LKE - expense of exchange, plus the excess basis (FMV of acquired property over FMV of exchanged property), then I have everything covered and the boot is basically already included in the deferred gain. Does it sound like I have correct??

Thanks!!!!!

[jainen]

You got it right

>>the boot is basically already included in the deferred gain<<

Well, technically the boot is EXcluded from the deferred gain, but I know what you mean! You got it right.

[peggysioux]

Boot

Thanks Jainen!!!