Tax free exchanges on real estate

How do you model 1031 Exchanges on real estate? I have a property that I will be selling next year and purchasing a new property with and the program is currently estimating taxes on the sales price.


dan royer's picture

Hmm. You could give yourself a tax-free special receipt in this same amount to offset the cap gain tax? Or perhaps you can not model that sale at all since it's happening next year and just change the value of the existing property next year after you make the exchange and settle things up financially with special expenditures/receipts with appropriate tax consequences.

I suppose I'm not very good with tax-related issues. If these thoughts don't give you an idea, I can ask one of our people here that knows much more about this kind of thing than I do.

I am currently adding back in a nontaxable receipt in that year, but it's not a good solution because it is affecting my actual state and federal tax calculations and there's no way to figure out the impact.

A good way to solve this would be to add a checkbox in the Real Estate area to mark a sale as tax free.

dan royer's picture

I'll pass this point on to the programmers.

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