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Like-Kind Exchange

Forum|Forum|6 years ago
March 8, 2020
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I am reporting a 1031 exchange on my taxes.

I reported a like-kind exchange from turbo-tax.

Do I also have to report the sales of the rental property that was involved in the 1031? When I do this, it shows a capital gain and increases my tax-burden.

The instructions aren't clear as to what I need to do.

TurboTax Business Windows

Best answer by Anonymous_

No, do not report that the property relinquished was sold; indicate the property was given away (but not donated to charity) as of the date of the exchange.

A

Anonymous_Answer

Employee

No, do not report that the property relinquished was sold; indicate the property was given away (but not donated to charity) as of the date of the exchange.

S

suncowiamAuthor

Appreciate your feedback.

The tax software should automate this to ensure that no issues/errors can result from it.

These manual solutions are hacks and could possibly bring scrutiny from the IRS.

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Anonymous_

Employee

@suncowiam wrote:
These manual solutions are hacks and could possibly bring scrutiny from the IRS.

I agree, except a lot of these entries actually just appear on worksheets in the program (that you retain for your records) and do not get transmitted to the IRS.

Regardless, the program, at this stage of development, should handle this type of transaction without having to resort to any manipulation (i.e., automatically throughout the entire process).