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April 17, 2022
Question

1031 Exchange is not working Need Help

  • April 17, 2022
  • 1 reply
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I sold a property and purchased a property following the 1031 Exchange guidelines. TT does not want to link the two properties for some reason. I still show all of the capital gains, nothing is deferred. No different that just selling.

 

Please Help

    1 reply

    Employee
    April 17, 2022

    @VTCROB , if I remember  correctly , under business income you have to tell TurboTax of the purchase of a property  and Turbo will walk you through filling out form 8824 reporting the 1031-exchange.  Here is some  info from IRS on the subject -->https://www.irs.gov/businesses/small-businesses-self-employed/like-kind-exchanges-real-estate-tax-tips.  Also generally speaking you should employ a qualified intermediary (QI) for the exchange to be effective under the law , except where the buyer of relinquished property , the seller of the new acquired/exchanged property and you are in the same room at the same time with the title company -- the exchange has to be done without any monies coming to your hands --- if you sell, deposit the funds  in escrow or your account, identify the new property  and complete the purchase within the stipulated six months  and pay from the escrow/your own account -- it may not pass muster.   Please see --> https://www.irs.gov/instructions/i8824

     

    I realize that I may be preaching to the choir, but I have personally done both forward and backward 1031 exchanges many years ago and I did employ a QI to make sure  things  meet the requirement.

     

    If you are sure of the situation then , please tell me more -- when did you sell, how did you hold the monies, when did you buy and how did you disburse the amounts, what did you tell TurboTax etc.  will help me recreate the scenario and see why TubroTax is misbehaving --yes?