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Problem Description

How do I fill out the MACRS Property Involved in a Like-Kind Exchange or Involuntary Conversion information on the Asset Entry Worksheet?

Solution Description

  1. The first line in this section "Elect OUT of regs under Section 1.168(i)-6T(i)" has three checkboxes.  To answer this question:
    1. Right-click on any one of the three checkboxes "Yes", "No", or "N/A" and choose "About exchange regs".
    2. If using the 1040, skip to line 4.
    3. If using the 1041, 1065, 1120, or 1120S, in the Help Center window that appears, scroll down and click on the blue hyperlink "Detailed information about how to enter MACRS property involved in a like-kind exchange or involuntary conversion."
    4. In the Help Center window, use the information in the descriptions of the checkboxes here to determine the box to mark that applies to the taxpayer's situation.
  2. The second line "Asset ID (Enter same ID on all related assets)" applies only in situations where the replacement property will be represented by two Asset Entry Worksheets, one representing excess basis, the other exchanged basis.  When this applies:
    • Enter an identifying (ID) number to represent this asset as part of the single asset received in the exchange.
    • Enter this same ID number on the other Asset Entry Worksheet that represents the other part of the basis for this single asset.
  3. The third line "If this asset represents entire basis of replacement property, enter excess basis" will be completed only when a single asset is entered to represent the property received.  This amount is the additional money (fair-market value of acquired property less exchanged basis) paid to acquire the replacement property.
  4. The fourth line heading "If this asset represents exchanged basis of replacement property, enter:" and the five lines that follow are applicable only when two assets are used to represent the excess and exchanged basis of the received asset.