We sold a rental, did a 1031 exchange to buy a replacement property. Completed the 8024 form. Where do I enter the new basis?

Forum|Forum|3 years ago
March 14, 2023
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In the new rental property section, I’ve entered the rental income and all the expenses, but there is no depreciation showing and no place to enter the basis, which I assume is required to calculate depreciation.

TurboTax Premier Online

Best answer by wclyon

Well, the TT processing of our 1031 exchange was not very user-friendly. I think even I could devise a better series of questions leading to a more direct result. After inputing every bit of info TT asked for, it still did not show any depreciation for the new rental property. Only after I added a new rental property (with the same address) using the TT calculated basis as the additional property cost, then close out the rental property section, did the depreciation show up…I then deleted the extra rental property and somehow- magically- the correct depreciation remained with my 1031 new property….super convoluted process and trial and error approach finally worked. I had the feeling TT was intentionally leading me to the “use a live person to help” option just to squeeze an extra $100+ out of me. I will definitely be looking for a different tax prep program next year.

RobertB4444

When you did the exchange you either entered the prior depreciable basis for the property you gave up or it was transferred from your prior year TurboTax account. That basis is what will be used to depreciate the new property. In addition, you were asked about the fair market value of the property that you gave up and the property that you received. Those will also be used to figure out the new basis.

Once all the information is entered for the new property then TurboTax will calculate the depreciation for you.

@wclyon

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wclyonAuthor

Thanks Robert. Doing the 8824 did calculate the deferred gain and the new basis. I expected the resulting depreciation to show on the new property expense list like it does for the relinquished property. It does not…I’m trying to figure how to get the depreciation to show up…is there a depreciation schedule somewhere for the new property? Is there some way to specifically enter the new basis? Should I enter the new property as a purchase? TIA

RobertB4444

The depreciation should be the same on the new property as it was on the relinquished property. That is probably what you are seeing.

If you want to see all of the behind-the-scenes worksheets for your tax return you should use the desktop program which allows you to look at all the worksheets that come up with the calculations as you go.

@wclyon

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