1031 Exchange and Tax Filings

Forum|Forum|3 years ago
April 25, 2023
1 reply
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Hello

Need some advice. My dad sold investment property in Florida. The net proceeds went into a 1031 exchange company. We have identified a new property and him /I are reinvesting into a new property in South Carolina as rental also. I will take an equity loan from my primary residence to make up the difference of the purchase price. The house will be paid for at that point.

On my next years' taxes:

1. Will I be able to claim deductions for property taxes, insurance, maintenance, depreciation etc. costa associated with the property.

2. The rent from this property will generate some profit that my dad will take as income because he only receives social security (minimal amount per year). Will I have to include that as 1099 for him at the end?

and if yeas he will have to claim that as additional to his social security when he files.

Just trying for the best to work out legitimately

Thank you

Critter-3

You and your dad have a partnership and should file a form 1065 accordingly which will issue a K-1 form to each partner for their portion of the profit/loss on the rental.

desanto05Author

@Critter-3 instead of that, wouldn't I be able to document a deduction on whatever I give to him on schedule E line 19 as "recipient adjustment to 1099 misc income" or something similar? I project to give him like 10-12k for an entire year plus whatever he gets in social security which is like $11K