On Wed, 13 Jul 2022 01:22:34 EDT, Taxed and Spent
<
nospamplease@nonospam.com> wrote:
On 7/12/2022 12:07 PM, bc wrote:
Client exchanged rental property for another rental property and a
property held in a Delaware Statutory Trust (DST) in 2021. My job
is to record everything on the books so I may prepare the
partnership tax return.
As I read the documents, Property L sold for $559. At closing $246
of debt was paid off. Property G was purchased for $165 with no
debt. Client put $5 into the closing on Property G. Property D was
purchased for $223 plus assumption of $224 debt.
I think that gives me boot on exchange of (246 - 5 - 224) = 17.
Agree?
DST annual statement includes a paragraph that Buyer agrees to
contribute an additional $250 for repairs to be completed after
closing. I don't have that document, but I have no reason to
believe this was in error. My analysis is this contribution to the
DST would be either repairs or capitalized at the time it is made,
and has nothing to do with the purchase. Agree?
Other than "strange" reporting, I treat the DST as a titling
issue, and report as I would all other properties (including
depreciation) - Rent Income, Rent Expenses, etc.
Since loan on Property L was paid off, I write off the unamortized
balance of loan fees on original loan. Agree?
It has been a long time since I fiddled with this sort of thing, but
this calculator may be of help:
https://www.1031.us/gainscalculation/
But:
$559-$246=$313 "cash" from the relinquished property.
$165+$223=$388 "cash" used to purchase the replacement properties.
You only mention the client putting in $5 toward replacement property G.
This doesn't add up. Did client put in cash toward replacement
property D?
This is why I always have to slow-walk multiple property
exchanges.
The settlement sheet for the purchase of Property G doesn't add
up. It has a note at the bottom "Total Amount Due From Buyer
$89k". After you get done with all the miscellaneous charges, I
think this plugs the hole. Client tells me this came from another
loan which was paid off in 2022.
--
Bruce Davidson Cantor, CPA, JD
Admitted in Colorado
--
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