David Posted November 2, 2016 Report Share Posted November 2, 2016 TP entered into a 1031 exchange in November 30, 2015, exchanging one residential rental house for 2 residential rental houses. All time requirements were met, no cash was received and no mortgages were assumed by either party. The first property acquired was closed on 12/28/15 and the second property closed February 26, 2016. None of the research materials seem to address how to handle the depreciation for a property relinquished for 2 properties when one property is purchased in one year and the other property is purchased in the following year. Do I allocate the exchange basis (adjusted basis of relinquished property) between the 2 replacement properties based on each replacement properties' cost and depreciate each allocated exchange basis along with depreciation for the excess basis for each replacement property? Of course, the depreciation for the 2nd replacement property won't be reported until 2016. Or is this handled a different way? Thanks for your help. Quote Link to comment Share on other sites More sharing options...
jklcpa Posted November 2, 2016 Report Share Posted November 2, 2016 Older article, still pertinent, has code sec & reg references:http://www.journalofaccountancy.com/issues/2008/nov/depreciatepropertyinlikekindexchangesconsistently.html 3 Quote Link to comment Share on other sites More sharing options...
SaraEA Posted November 3, 2016 Report Share Posted November 3, 2016 2 hours ago, David said: Do I allocate the exchange basis (adjusted basis of relinquished property) between the 2 replacement properties based on each replacement properties' cost and depreciate each allocated exchange basis along with depreciation for the excess basis for each replacement property? Say what? This sounds like a question on the SEE exam. (Sorry, I don't minimize your dilemma. Sounds like you've spent so much time researching this and are so into the rules and terminology that your posting comes across as proof that the IRC is gibberish at this point.) Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted November 3, 2016 Report Share Posted November 3, 2016 2 hours ago, SaraEA said: Say what? This sounds like a question on the SEE exam. (Sorry, I don't minimize your dilemma. Sounds like you've spent so much time researching this and are so into the rules and terminology that your posting comes across as proof that the IRC is gibberish at this point.) You are right, I just took SEE2 exam last week and basis questions were a killer 1 Quote Link to comment Share on other sites More sharing options...
David Posted November 3, 2016 Author Report Share Posted November 3, 2016 3 hours ago, SaraEA said: Say what? This sounds like a question on the SEE exam. (Sorry, I don't minimize your dilemma. Sounds like you've spent so much time researching this and are so into the rules and terminology that your posting comes across as proof that the IRC is gibberish at this point.) Ha ha. You're right. Sorry about that..... Quote Link to comment Share on other sites More sharing options...
David Posted November 3, 2016 Author Report Share Posted November 3, 2016 Thanks, Judy for your help. 1 Quote Link to comment Share on other sites More sharing options...
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