WITAXLADY Posted March 24, 2022 Report Share Posted March 24, 2022 everything is in order - I just am having a blank moment 1- what is adjusted basis? after depreciation? of old property 2 - price of new property - can I add in fix-up costs or are those to be improvements? Thank you D all rest falls properly but my head hurts and I hate taxes right now!! Quote Link to comment Share on other sites More sharing options...
WITAXLADY Posted March 24, 2022 Author Report Share Posted March 24, 2022 ok - adjusted basis is the amount after depreciation - 2 properties sold for $425,000 expenses of $84,000 for paying off commissions, loan etc. Owner intermediary received $361,000 New property was $285,000 Do I use the $361,000 or the $425,000? and therefore have taxable gain of $140,000? Thx Quote Link to comment Share on other sites More sharing options...
KATHERINE Posted March 24, 2022 Report Share Posted March 24, 2022 Hi Witax, I think the net proceeds are $341K, then use $341K to calculate the gain. then 83.57% gain (285K/$341K) will be allocated to the new house and reduce new house basis by the gain ($285K - 83.57% Gain=new house depreciable basis). then pay tax on the 16.42% gain. Let us wait others comments on this. Quote Link to comment Share on other sites More sharing options...
Lion EA Posted March 25, 2022 Report Share Posted March 25, 2022 Do you really get to deduct the old loan payoff from the sales price in an exchange? If you just were selling a house, it'd be sales proceeds - adjusted cost basis/some selling costs. You wouldn't subtract the loan from the sales proceeds. 1 Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted March 25, 2022 Report Share Posted March 25, 2022 11 hours ago, WITAXLADY said: 2 properties sold for $425,000 expenses of $84,000 for paying off commissions, loan etc. Owner intermediary received $361,000 New property was $285,000 This is not clear to me, looks like more information is needed or clarified. Basis of property relinquished? Accumulated depreciation? Mortgage on old property? Selling expense? Mortgage on new property? Sold (exchanged) two properties for 425,000 and 285,000 for replacement? 1 Quote Link to comment Share on other sites More sharing options...
Lee B Posted March 25, 2022 Report Share Posted March 25, 2022 The solution to this puzzle is kinda foggy with several missing pieces. Quote Link to comment Share on other sites More sharing options...
WITAXLADY Posted March 27, 2022 Author Report Share Posted March 27, 2022 Basis of property relinquished? - Initial cost - $260,000 Accumulated depreciation? - depreciation - $190,000 Mortgage on old property? - $70,000 Selling expense? - $30,000 Mortgage on new property? -0- Sold (exchanged) two properties for 425,000 - yes and 285,000 for new replacement? plus $30,000 fix up to re-rent does this help? thx d Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted March 28, 2022 Report Share Posted March 28, 2022 7 hours ago, WITAXLADY said: Sold (exchanged) two properties for 425,000 - yes and 285,000 for new replacement If sell price was 425,000, loan payoff 70,000, sell expense 30,000; then 425,000-70,000-30,000= 325,000 to exchange agent; instead of 361,000? Then 325,000 - 285,000 = 40,000 of cash to seller. Are we missing something here before we go further? 1 Quote Link to comment Share on other sites More sharing options...
jklcpa Posted March 28, 2022 Report Share Posted March 28, 2022 Yes, there seems to be problems with the figures. In the original post, selling expenses including loan payoff were $84 and intermediary received $361, so that example has a $20K difference. And now the loan payoff was supposedly $70? Problems all around. 1 Quote Link to comment Share on other sites More sharing options...
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