1033 conversion with subsequent 1031 exchange

Technical topics regarding tax preparation.
#1
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Taxpayer owned residential rental property with adjusted basis of $100,000.

Property burned to the ground on 4/1/2020 and taxpayer received $300,000 from insurance on 6/1/2020.

Taxpayer did not repair the property and relinquished it in a 1031 exchange on 10/1/2020 for $250,000. Replacement property (which is also residential rental property) was acquired on 11/30/2020 for $550,00.

Does this 1033 involuntary conversion with subsequent 1031 like-kind exchange work to defer gain or is there a trap somewhere?

Assuming it works, any thoughts for the 8824?
 

#2
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Anyone out there want to agree / disagree that the basis of the replacement property is $100,000?
 

#3
MIKEB  
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Wouldn't that just be a 1033 exchange? I agree the basis is $100k.
I have a similar scenario. Rental burned down in Colorado fire. Basis $75k, insurance $300k on structure. Client is not rebuilding. Land to be sold for $300K. Buying existing replacement property for $600. Basis $75k in new property and gain deferred.
Can't this be done as 1033 exchange??
 


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