revisit like kind exchange

[WITAXLADY]

is this clearer?

taxpayer did a 1031 exchange - - properly. 2 properties rental for 1 property. "Sold" thru an intermediary for $425,000, paid off loan of $70,000, other costs of sale, $360,000 in cash held.

Within 45 days purchased thru the 3rd party, a property for $285,000 and fix-up costs of $50,000.

Also, the properties sold had an adjusted basis after depreciation of $60,000. $240,000 - $180,000 From the $425,000, used $7,000 as cost of sale of all the appliances,furnishings, etc. So as I see it the $285,000 is what gets used for the like-kind? Can I add in the immediate $50,000 fix-up costs as it was paid out of intermediary dollars?

The difference between the $425,000 and purchase price of the new property is capital gains? Where do the expenses go for commission of sale of old property? And expenses on sale of new property. I did like-kind on Fixed Assets and 8824 - but not sure on answers and $$$ amounts I should be using - the tax seems way too high - about $50,000 

D

[DANRVAN]

 

You still need to provide some more detail:

-cash received

-amount of loan paid off (70,000?)

-exchange expenses

You indicated $50,000 to fix up new property that came out of exchange funds.  That was not part of the exchange, so it is treated as cash received, boot.

Also the loan payoff is treated as boot. 

So at this point it looks like at least 120,000 in boot which is taxable gain.