Sale of Real & Tangible Prop Used in Business

Question 1

How do you arrive at basis of newly acquired property in a 1031 exchange?

Answer 1

=Basis of original property transferred

Increased by:

• additional money pd in exchange (including exchange exps ex. unpaid RE taxes)
• basis of any non-like kind property transferred to other party
• net liabilities assumed by taxpayer
• any gain recog’d in exchange

Decreased by:

• boot received (ex. money, FMV of non-like kind prop, net liabilities other party assumes)
• any loss recog’d in exchange