1031 Exchange - Spidell

1031 Exchange

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Message Board 1031 Exchange

  • This topic has 4 replies, 4 voices, and was last updated 7 months ago by Larry Pon.
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    • #194249

      I am sure that a property cannot be exchanged for one of lesser value, am I correct. If it can be exchanged for a lesser property, would the new basis be zero and the balance of the gain subject to capital gains? Selling price $3.8m, gain $1.5m, wants to exchange into 683,000. I dont think this qualifies for 1031 exchange.

    • #194423
      Larry Pon

      This transaction can still qualify as a 1031 exchange, however, the difference between the value of the old and new property will be considered taxable boot.    In your example, about $1,230,000 will be the taxable gain.  Take a look at the Tax Tools 1031 worksheet to help you figure out the taxable gain.  Don’t forget to include the exchange expenses to help lower the gain.

      Does the old property have a mortgage?

      What are they doing with the net proceeds?

    • #194671
      Lance Kirby

      old mortgage is 1,365,000


      proceeds other private non real estate or farm investments. he is 75

    • #198906
      Stella Tsai

      Hi Larry, Where can I locate the Tax Tools 1031 worksheet you mentioned in your response.
      Many Thanks!!

    • #199211
      Larry Pon


      Their technical support is very helpful.

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