like kind exchange?

[WITAXLADY]

everything is in order - I just am having a blank moment

 

1- what is adjusted basis? after depreciation? of old property

2 - price of new property - can I add in fix-up costs or are those to be improvements?

Thank  you

D

all rest falls properly but my head hurts and I hate taxes right now!!

[WITAXLADY]

ok - adjusted basis is the amount after depreciation -

2 properties sold for $425,000

expenses of $84,000 for paying off commissions, loan etc.

Owner intermediary received $361,000

New property was $285,000

Do I use the $361,000

or the $425,000? and therefore have taxable gain of $140,000?

Thx

[KATHERINE]

Hi Witax,

I think the net proceeds are $341K, then use $341K to calculate the gain.  then 83.57% gain (285K/$341K) will be allocated to the new house and reduce new house basis by the gain ($285K - 83.57% Gain=new house depreciable basis).  then pay tax on the 16.42% gain. 

Let us wait others comments on this.

 

[Lion EA]

Do you really get to deduct the old loan payoff from the sales price in an exchange?

If you just were selling a house, it'd be sales proceeds - adjusted cost basis/some selling costs. You wouldn't subtract the loan from the sales proceeds.

[DANRVAN]

11 hours ago, WITAXLADY said:

2 properties sold for $425,000

expenses of $84,000 for paying off commissions, loan etc.

Owner intermediary received $361,000

New property was $285,000

This is not clear to me, looks like more information is needed or clarified.

Basis of property relinquished?

Accumulated depreciation?

Mortgage on old property?

Selling expense?

Mortgage on new property?

Sold (exchanged) two properties for 425,000 and 285,000 for replacement? 

 

 

[Lee B]

The solution to this puzzle is kinda foggy with several missing pieces.

[WITAXLADY]

Basis of property relinquished? - Initial cost - $260,000

Accumulated depreciation? - depreciation - $190,000

Mortgage on old property? - $70,000

Selling expense? - $30,000

Mortgage on new property? -0-

Sold (exchanged) two properties for 425,000 - yes  and 285,000 for new replacement? plus $30,000 fix up to re-rent

 

does this help?

thx d

[DANRVAN]

7 hours ago, WITAXLADY said:

Sold (exchanged) two properties for 425,000 - yes  and 285,000 for new replacement

 

If sell price was 425,000, loan payoff 70,000, sell expense 30,000; then 425,000-70,000-30,000= 325,000 to exchange agent; instead of 361,000?

Then 325,000 - 285,000 = 40,000 of cash to seller.  Are we missing something here before we go further?

[jklcpa]

Yes, there seems to be problems with the figures.  In the original post, selling expenses including loan payoff were $84 and intermediary received $361, so that example has a $20K difference. And now the loan payoff was supposedly $70?  Problems all around.