Taxpayer looking to a complete a §1031 like-kind exchange sold a property on 10/5/2021 for $1,000,000 and identified and purchased one replacement property on 11/5/2021 for $800,000 (therefore resulting in boot received of $200,000). After the purchase of the replacement property but within the 45 day identification period, the taxpayer identified two additional replacement properties to be acquired in tax year 2022. The taxpayer used a qualified intermediary for all pertinent transactions.
My research shows that this series of events results in no income tax effect in tax year 2021 as the potential implications (ex. recognition of gain due to boot received if at least one of the identified properties is not purchased in tax year 2022 or deferral under §1031 if at least one of the identified properties is purchased) have been pushed into tax year 2022. Of course, "bona fide intent" issues may come into play and I will advise the client accordingly.
Am I missing something here? Does this series of events result in no income tax implications for tax year 2021?
Also, in terms of reporting, this series of events would need to be reported as an installment sale on Form 6252 for tax year 2021 and then Form 8824 for tax year 2022, correct?
Your help would be greatly appreciated!