1031 Exchange glitch in Turbo Tax

Forum|Forum|6 years ago
February 9, 2020
2 replies
0 views

When using the Self Employed version of TT and adding a 1031 property exchange I found a glitch I could not get by. After entering information for my relinquished property and my newly acquired like kind property, I get a prompt to enter amounts for" Different Property Received". This is for cash or other property received that are not directly reflected in the properties sold and purchased. Here it is not possible to enter zero. Even though I had no property or money received other than what is declared in other parts of the form. Any help in getting past this prompt with a 0 (or blank responses) would be appreciated?
BTW this appears to be a query to populate IRS form 8824 line 15, which I need to be 0.
Thanks for any insights.

TurboTax Self Employed Online

Anonymous_

@alienbm wrote:
Thanks for any insights.

I am not sure how insightful you will consider this, but the prompt to which you referred (and cannot pass) typically occurs when the fair market value of the replacement property is less than that of the relinquished property.

For whatever it is worth, I tried inputting a few variations into TurboTax Home & Business (sort of the installed analog to Self-Employed) and did not encounter any issues.

If you would like to post numbers (even if hypothetical), I, and others, can attempt to reproduce your results.

alienbmAuthor

Thanks for that observation. I discovered that you are correct.
Because my relinquished property is valued at 276K, and my new property is valued at 375K, and I am taking a 121K loan on the new property, TT apparently sees a deficit of 22K that I am not accounting for.
However, TT is apparently not including the 18K in sales and legal expenses that I enter later for Sale Expenses, nor nor is there an accounting of the 3K is closing expenses for the new purchase. Nor does TT ask what amount I invested from the sale property into the new property (258K). So while in reality I took no money away, and invested all of the sales proceeds into the new property, I can not get past the Different Property Received prompt without entering 22K, Then TT wants to tax me on 22K.
So other ideas welcome about how to use TT for the 1031 exchange and not pay tax I clearly am eligible to defer. Thanks much for your patience with the details.

ramonlim

I am running into this same issue. Any insight?

wgonyea75

I am having an issue as well. The Different Property Received really throws me off. Even though my relinquished property was $400K and my new property was $375K, the properties are not different in nature and character. I know I am supposed to pay capital gains on $25K which should be accounted for with the information in the two screens where you enter all the information for each property. I think that screen should say Yes or No. I am on with someone now about my case. I'll post the answer soon.

PoconoRick

Any answer on this yet?

JotikaT2

I recommend updating your software and trying again. This can be done by logging into your desktop product. Select Online in the menu on the top, and then select Check for Updates.

If that does not update your program, you can also manually update your program.

When entering the like kind exchange information, on the screen that is titled "Different property received," leave the input sections blank and select Continue. If you meet the requirements to not report anything here, you will able to continue without entering any information here and will proceed to the screen titled "Exchange expenses." You would then proceed and be able to see any taxable gain, if any.

However, if your input so far indicates you have additional information to enter as far as different property received, you will not be able to proceed without entering information on the different property received screen and may need to go back to review your entries on the initial 1031 input screens. The error message will tell you exactly what the issue is.

Be sure to check not only the fair market value input but also the loans assumed with the property you received as these will also affect your overall calculation.