1031 Exchange-what goes in what line?

Forum|Forum|3 years ago
February 10, 2023
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We sold one rental condo and purchased another in 2022 via a 1031 exchange. I'm having difficulty figuring out what goes where in Turbo tax as there doesn't seem to be a direct relationship with IRS form 8824 (I'm assuming that gets populated later). Turbotax is asking for the Fair Market Value. Does it mean the actual selling price? On what line do I report the exchange expenses? When I plugged in the sales price of the relinquished and the new property, plus the mortgage amount, which it also asks for, it says they don't match but gives no place to put in the sales commission and other expenses, which account for the difference. Just not sure what to put where. Thanks!

GeorgeM777

No, the fair market value (FMV) of the property is the amount a willing buyer would pay and a willing seller would accept. Thus, it could be different than the actual sale price, but it could also be the same. You would have to determine that FMV based on other resources available to you. The important thing to remember is to have reasonable support for the FMV whatever the value.

On the screen where you enter the FMV information entitled Like-Kind Property Given Up, you can enter the exchange expenses in the box for the adjusted basis of the like-kind property you gave up. The expenses get added to the basis and the resulting number is your adjusted basis.

@tchristenson

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